Bitcoin and other cryptocurrencies are digital means of payment used on a peer-to-peer and decentralized computer network, based on the principles of cryptography.
There are currently about 2’000 cryptocurrencies and new ones are constantly being added. The most well known and widely used cryptocurrencies are Bitcoin, Ethereum, Bitcoin Cash, Ripple, Litecoin, IOTA and Dash.
Property tax on Bitcoin
In Switzerland, holders of Bitcoins are subject to wealth tax at the rate determined by the tax authorities on December 31st of the fiscal year.
Thus the holder of Bitcoins will have to declare them in his annual tax return with the other assets.
In Geneva, for a taxable wealth of CHF 1 millon, the amount of property tax is about CHF 6’000.-.
Income tax on Bitcoin
Capital gains from movable private assets are generally tax-exempt in Switzerland. Accordingly, losses on cryptocurrencies can not be deducted for tax purposes.
However, if someone qualifies as a professional trader, the profits from the Bitcoin trade are part of the taxable income and must be reported as income from self-employment. Losses are deductible.
At this moment, we believe that for the vast majority of persons in Switzerland, the capital gains on Bitcoin and other cryptocurrencies would not be subject to taxes on capital gains.
It is strongly recommended to clarify with a tax specialist if one is in the presence of a commercial activity or in the management of one’s private wealth.
In case you need tax or legal advice, please contact us an we would be happy to assist you.
The Blog Goldenvisa.ch is run by Fiduciaire Bleich Sàrl, expert in accounting, taxes, domiciliation and management of Swiss companies