NFTs: legal and tax aspects
An NFT (non-fungible token) is a unique token recorded on a blockchain, often linked to digital content — an image, a video, an access right, an entitlement. The word “NFT”, however, describes only the technology, not the legal nature of what is being exchanged. The central question, in Switzerland as elsewhere, is to understand which right the token actually transfers: everything legal and fiscal flows from there. Here is how to frame the analysis.
An NFT is not the content it points to
The first misconception to dispel: buying an NFT almost never means buying the intellectual property of the associated work. In most cases the buyer obtains a token that represents a link to a piece of content, but the copyright stays with the creator, unless the contract or the terms of issuance provide otherwise. Before issuing or buying an NFT you therefore have to define precisely what is being transferred: ownership of the work, a licence to use it, an access right, or simply a certificate of association. This definition must be set out explicitly.
Legal qualification
As with other tokens, in Switzerland what matters is function. An NFT that grants access to a service or to content resembles a utility token; an NFT that confers financial rights or shares in a project may come close to an investment token, with stricter regulatory obligations; a purely collectible NFT follows yet another logic. The qualification is not an academic detail: it changes the regulatory treatment, the disclosure obligations and, in certain cases, the anti-money-laundering obligations. It must be done before issuance, not after.
The creator’s taxation
Anyone who creates and sells NFTs as an activity — an artist, a studio, a project — generally carries on a gainful activity: the proceeds are taxable as income or profit, depending on whether they operate as a self-employed individual or through a company. The following must be considered:
- The taxation of sale proceeds, at the CHF countervalue at the time of the transaction.
- Any royalties on subsequent resales (if provided for in the smart contract), which constitute further income.
- VAT: the transfer of NFTs representing a supply of services or goods may be taxable, with the registration threshold of CHF 100,000 in turnover and the standard rate of 8.1% where the transaction is taxable. The treatment depends on what the token entitles the holder to receive, and where.
The collector’s taxation
For those who buy NFTs as part of their private assets, the picture follows the general principles applied to crypto-assets: the NFTs held form part of taxable wealth and must be declared at their value, while the treatment of resale gains depends on whether the activity qualifies as management of private assets or as professional trading. Those who buy and resell frequently and systematically may be regarded as professional traders, with different consequences.
Anti-money laundering and source of funds
The NFT market has drawn attention on the anti-money-laundering front: large amounts, rapid transactions, difficulty in identifying counterparties. Anyone structuring platforms or carrying out intermediation activities must check whether customer identification and source-of-funds obligations are triggered — obligations that may require authorisations. Even for one-off transactions of significant value, being able to document the source of funds is prudent.
Getting it right from the start
The typical mistakes — not defining the rights transferred, not qualifying the token, not documenting values and transactions — are hard to fix afterwards. Whether it is an artist launching a collection or a project integrating NFTs into its model, consistency between the terms of issuance, the contract, the smart contract and the tax treatment is what holds up over time.
Our role
SIH ONE provides structuring and advisory services: defining the rights transferred, qualifying the token, setting up the tax and accounting framework. Activities subject to authorisation are handled through authorised partners.
This content is informational and does not constitute legal or tax advice. Every NFT project must be assessed on its specific facts.
Do you want to issue or manage NFTs with clear rights and a correct tax framework? Let’s set up your project’s structure together. Let’s talk.