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Switzerland classifies cryptocurrencies as intangible assets. In its August 2019 cryptocurrency tax guidance, the Swiss Federal Tax Administration (FTA) differentiates between native token/payment token, utility token, and asset token. With regard to the income tax treatment of mining of native tokens, which is subject to cantonal law, the FTA stated that block rewards received for mining are included in taxable income if the general criteria for a self-employed activity are fulfilled. The separately issued VAT guidance provides general remarks about the taxation of block rewards, but explains differences between pool mining and pool staking more in detail. Receiving a block reward is generally not a taxable event for Swiss VAT purposes. Pool mining and pool staking are both taxable under VAT law and are treated the same.

It appears that there is no official guidance with regard to the tax treatment of airdrops or hard forks.

In June 2020, the Swiss Federal Council, the Swiss government, stated that there is currently no need to amend Swiss tax law with regard to blockchain transactions.

I. Introduction

Switzerland classifies cryptocurrencies as intangible assets (property). The Swiss Federal Tax Administration (FTA) (Eidgenössische Steuerverwaltung, EStV) differentiates between native tokens/payment tokens, utility tokens, and asset tokens.[1] Native tokens are defined as “digital value rights that are suitable to be used as a means of payment depending on their circulation and infrastructure. The issuer does not have an obligation to make a certain payment or provide a service vis-à-vis the investor.”[2] Asset tokens represent “monetary claims against the issuer or counterparty within the framework of an initial coin offering (ICO) or an initial token offering (ITO).”[3] Their tax treatment depends on the civil law relationship between the issuer and investor.[4] Utility tokens that are issued within the framework of an ICO or an ITO are those that provide investors with the right to use digital services on a (decentralized) platform service, generally by means of a blockchain-based infrastructure.[5] As with asset-backed tokens, their tax treatment depends on the civil law relationship between the issuer and investor.[6]

On June 19, 2020, the Swiss Federal Council, the Swiss government, published a report prepared by the Federal Department of Finance on the need to amend Swiss tax law with regard to blockchain.[7] The report concluded that there is currently no need to adopt specific tax law provisions dealing with blockchain.[8]

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II. Tax Treatment of Block Rewards

The FTA in its cryptocurrency tax guidance issued in August 2019 only discussed mining and the taxation of block rewards with regard to native tokens. However, it pointed out that the guidance is only a snapshot of the tax situation up to May 2019 and will be continuously developed as new situations arise, in particular with regard to ICOs/ITOs.[9]

A. Wealth Tax

Native tokens are intangible assets and therefore subject to wealth tax.[10] In Switzerland, the individual cantons, the Swiss states, are obligated to levy income tax and wealth tax on the total property (assets and rights with a cash value) of taxpayers that are resident in their canton.[11] Property is assessed at market value at the end of the tax period.[12] Tax rates vary between the individual cantons. Cryptocurrencies are treated like foreign currencies for wealth tax purposes. Holders of cryptocurrencies are taxed at the rate determined by the tax authorities on December 31st of the fiscal year. The Swiss FTA provides tax rates for Bitcoin and other common cryptocurrencies on its website.[13] These rates are a recommendation to the cantonal tax authorities for wealth tax purposes, but most cantons follow them.

B. Income Tax

As mentioned, income tax rates are levied by the cantons and vary from canton to canton. Mined native tokens represent a reward for the mining activity. If the general criteria for a self-employed activity are fulfilled, then the rewards are included in taxable income.[14]

C. VAT

Value-added tax (VAT) is levied according to the Federal VAT Act.[15] As Liechtenstein and Switzerland form a common VAT area due to a tax agreement, the following remarks are also applicable to Liechtenstein.[16]  

Block rewards received for mining do not qualify as compensation as defined in the VAT Act, because there is no exchange of services.[17] If validating blockchain transactions is only compensated with block rewards, it does not qualify as an activity aimed at making a profit and is therefore not a business activity.[18] On the other hand, if the miner receives a transaction fee as compensation for the validation of a block, there is a taxable exchange of services between the miner and the network users. The validation of the transaction is subject to the general VAT rate for a beneficiary located within the tax territory.[19] A block reward that is generated in addition to the transaction fee has no influence on the input tax deduction.[20]

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III. Differences in the Tax Treatment of Mined Tokens and Staked Tokens

Only the federal VAT guidance mentions staked tokens separately. The VAT guidance provides general remarks about block rewards, but explains differences between pool mining and pool staking in more detail. However, the taxation is the same.

With regard to pool mining, the miner contributes his processing power to a mining pool and is compensated with block rewards. The mining pool operates the mining software and provides other additional services. According to the VAT guidance, there is a tax-relevant exchange of services between the miner and the mining pool. The place of performance is determined according to section 8, paragraph 1 of the VAT Act.[21]

The VAT guidance states that with regard to pool staking, owners of staking coins/tokens may participate in a staking pool by contributing their stakes. In general, they are compensated with a percentage in the transaction fee received for the staking. The staking pool operates the staking software. There is a tax-relevant exchange of services between the individual participants and the staking pool. The place of performance is determined according to section 8, paragraph 1 of the VAT Act.[22]

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IV. Tax Treatment of Tokens Received Through “Airdrops” and “Hard Forks”

It appears that there is no official guidance with regard to the tax treatment of airdrops and hard forks.

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Prepared by Jenny Gesley
Foreign Legal Specialist
January 2021


[1] Eidgenössische Steuerverwaltung [EStV], Arbeitspapier. Kryptowährungen und Initial Coin/Token Offerings (ICOs/ITOs) als Gegenstand der Vermögens-, Einkommens- und Gewinnsteuer, der Verrechnungssteuer und der Stempelabgaben 3 (Aug. 27, 2019), https://perma.cc/RQE2-KXKR.

[2] Id. at 4, para. 2.1.

[3] Id. at 6, para. 3.1.

[4] Id.

[5] Id. at 14, para. 4.1.

[6] Id.

[7] Eidgenössisches Finanzdepartement [EFD], Bericht zu einem allfälligen Anpassungsbedarf des Steuerrechts an Entwicklungen der Technik verteilter elektronischer Register (DLT/Blockchain) (June 19, 2020), https://perma.cc/N2R5-SZDF; Press Release, Federal Council, Blockchain and Distributed Ledger Technology: No Repercussions for Tax Law (June 19, 2020), https://perma.cc/QH85-PDXB.

[8] Id.

[9] EStV, supra note 1, at 3, para. 1.

[10] Id. at 4, para. 2.2.1.

[11] Bundesgesetz über die Harmonisierung der direkten Steuern der Kantone und Gemeinden [StHG], Dec. 14, 1990, Systematische Rechtssammlung [SR] 642.14, art. 2, para. 1 & art. 13, para. 1, as amended, https://perma.cc/TZ98-PQHJ.

[12] Id. art. 14, para. 1.

[13] Course Listings Federal Income Tax, Federal Tax Administration, https://perma.cc/8X69-K9DL.

[14] EStV, supra note 1, at 4, para. 2.2.2; Bundesgesetz über die direkte Bundessteuer [DBG], Dec. 14, 1990, SR 642.11, art. 18, as amended, https://perma.cc/V7R7-99SM.

[15] Bundesgesetz über die Mehrwertsteuer [Mehrwertsteuergesetz] [MWSTG], June 12, 2009, SR 641.20, as amended, https://perma.cc/U8HD-BX5M (original), https://perma.cc/JZ78-4SEN (English translation).

[16] Vereinbarung zwischen der Schweizerischen Eidgenossenschaft und dem Fürstentum Liechtenstein zum Vertrag betreffend die Mehrwertsteuer im Fürstentum Liechtenstein, July 12, 2012, SR 0.641.295.142.1, as amended, arts. 1, 2, https://perma.cc/4FYQ-GGBY.

[17] EStV, MWST-Info 04 – Steuerobjekt. Validieren und Verifizieren von Transaktionen über die Blockchain, para. 2.7.3.5. (June 17, 2019), https://perma.cc/KU5K-C4DT; MWSTG, art. 18, para. 2.

[18] EStV, supra note 17, para. 2.7.3.5.

[19] MWSTG, art. 18, para. 1 in conjunction with art. 8, para.1.

[20] Id. art. 33, para. 1.

[21] EStV, supra note 17, para. 2.7.3.5.

[22] Id.

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Last Updated: 02/05/2021