Taxation of NFTs for creators and collectors
NFTs are treated very differently for tax purposes depending on who you are and what you do. The creator who mints and sells works is not taxed like the collector who buys and resells them, and the picture changes again if the activity becomes professional. In Switzerland there is no “NFT tax”: there are the ordinary taxes applied to the substance of the relationship. Here is how the main cases are framed.
The creator: when the sale is income
Anyone who creates and sells NFTs generally carries on a gainful activity. The proceeds of sales are taxable income, like the fee for any service or transfer within the scope of an activity. It does not matter that payment is made in crypto: the revenue is converted into francs at the value of the moment and forms part of income.
If the activity is carried on with continuity, organisation and the aim of profit, it may qualify as independent gainful activity, with consequences for: deductibility of related costs, social security contributions, and — in the case of significant volumes — accounting obligations. The form in which one operates (self-employed individual or company) affects the overall treatment.
Royalties on subsequent sales
Many NFTs provide for royalties in favour of the creator on resales. When collected, these royalties are a return on their activity and follow the logic of income. They must be tracked: being paid on-chain and over time, it is easy to lose sight of them, but they remain taxable and must be documented at the conversion value at the time of collection.
The collector: wealth, and the capital-gains question
For those who buy and hold NFTs as private individuals, two aspects apply.
- Wealth tax: the NFTs held form part of movable wealth and must be declared at the reference value at the end of the period. The valuation of illiquid or unique assets is delicate and must be justified.
- Capital gains: in the management of private wealth, capital gains on movable assets are in principle exempt from income tax, while losses are not deductible. But the exemption is not automatic: if the buying-and-selling activity takes on the characteristics of professional dealing (frequency, use of leverage, organisation, short holding period, use of specialist knowledge), the gains become taxable income from gainful activity.
The boundary between private collector and professional dealer is the central tax question for those operating with volume: it must be assessed on the concrete facts, not taken for granted.
VAT (MWST): when it comes into play
The transfer of NFTs may fall within the scope of VAT depending on the nature of the supply and the place where it is deemed to be made. Anyone carrying on the activity in an entrepreneurial manner must check their position against the registration threshold of CHF 100,000 in turnover. The VAT treatment of NFTs depends on what the token actually conveys (a good, a service, a right) and must be analysed case by case, without taking exemption for granted.
The practical problem: traceability
The greatest difficulty, for creators and collectors, is documenting fragmented transactions, in crypto currencies, across different platforms. What is needed: a transaction register with date and conversion value in CHF, evidence of related costs, tracking of royalties, valuation of assets at year-end. Without this base, the tax return becomes an estimate that is hard to defend in the event of an audit.
The correct sequence
First you qualify the role (creator, private collector, professional operator); then you set up the traceability of transactions in CHF; then you define the treatment for income, wealth and VAT; finally you assess the form of activity and social security contributions. Selling and buying first, reconstructing afterwards, is the path that generates costly assessments.
How SIH ONE approaches the topic
SIH ONE handles structuring and advice: qualification of the tax position of creators and collectors, setting up of the treatment for income, wealth and VAT, design of the traceability system for crypto transactions, assessment of the threshold between private wealth and professional activity. Where activities subject to authorisation are needed, the regulated activities go through authorised partners. The aim is a clear and defensible tax position.
This content is informational and does not constitute tax advice. The figures and treatments must be verified in the specific case and may vary according to cantonal practice.
Do you operate with NFTs as a creator or collector and want your tax position in order? Let’s talk about it: we qualify the case and set up the treatment and traceability.