Taxation of cryptocurrencies for private individuals

Anyone holding cryptocurrencies as a private individual in Switzerland starts with good news: capital gains on a sale are, in principle, part of the tax-exempt capital gain. But the exemption is not automatic and coexists with other very specific obligations. Understanding where private wealth ends and taxable income begins is the central point.

Cryptocurrencies as wealth

From a tax perspective, tokens held by a private individual are movable wealth items, on a par with securities or currency accounts. As such they must be declared for wealth tax, valued at the year-end rate in CHF.

For the main cryptocurrencies, the Federal Tax Administration publishes a reference rate as at 31 December; many cantons adopt it.
For illiquid tokens or those without an active market, the declaration is at the purchase price or at an estimated value based on a documented criterion.
Wealth tax is cantonal and communal: the effective rate depends on the canton and on total wealth.

Even if you sell nothing during the year, the tokens must still be indicated in the tax return.

The capital gain on a sale: when it is exempt

For the private individual managing their own wealth, the capital gain on the sale or exchange of cryptocurrencies is generally a tax-exempt capital gain for income tax purposes. This is the same principle applied to shares and bonds held privately.

The exemption lapses, however, if the activity takes on the characteristics of professional securities dealing. Practice assesses a series of indicators:

high frequency of transactions and short holding period;
transaction volume disproportionate to total wealth;
significant recourse to third-party capital (leverage);
systematic use of derivative instruments;
reinvestment of gains as a quasi-professional activity.

If these criteria are met, the gains are reclassified as income from gainful activity, taxable and potentially subject to social security contributions. There is no single numerical threshold: it is an overall assessment, and caution is advisable.

The income: staking, lending, mining

Not everything a token yields is an exempt capital gain. Some activities generate taxable income at the moment of crediting, valued at the rate at that time:

Staking and lending: periodic rewards are generally regarded as income from movable wealth.
Mining: if organised with means and continuity, it may constitute independent gainful activity.
Airdrops and payments in tokens: these must be assessed case by case, often as income when they are the consideration for an activity.

The token received therefore generates income on receipt and, at year-end, falls under wealth tax: these are two distinct levels that add up.

Documentation makes the difference

Reconstruction after the fact is the most frequent practical problem. It is advisable to keep from the outset:

A complete transaction history for each exchange and wallet (date, quantity, countervalue in CHF).
The value on receipt of staking, airdrops and payments, at the day’s rate.
The year-end rate of each token held as at 31 December.
A record of transfers between your own wallets, to distinguish them from sales.

An orderly register simplifies the tax return and holds up to any request for clarification.

Common mistakes

Thinking that, having not sold, there is nothing to declare: the wealth must be indicated anyway.
Ignoring staking income, treating everything crypto-related as “exempt”.
Underestimating the professional-dealing criteria with very intensive trading.
Not keeping the history and having to reconstruct it months later.

In summary

Tokens are movable wealth: declaration at the year-end rate.
The private individual’s capital gain is generally exempt, save for professional dealing.
Staking, lending and mining generate taxable income on receipt.
Orderly documentation is the best protection.

How we help you

For private individuals with cryptocurrency holdings we handle the structuring and tax advice: qualification of income, assessment of the professional-dealing risk and preparation of the tax return. Activities subject to authorisation — custody and VASP services — go through authorised partners. Let us frame your crypto position.