Taxation of Cryptocurrencies

Cryptocurrencies are increasingly permeating our daily lives. Especially in the last year, many people have engaged with the topic and also invested in various currencies. These cryptocurrencies should be taxed like foreign currency.

What are cryptocurrencies?

‍Cryptocurrencies are digital currencies, which are not tied to any particular country and are not controlled by any state. The currencies themselves are created decentrally through the computing power of private individuals. All these private individuals are connected in a huge global network. This network operates on the basis of mutual control. A action or transaction is only deemed valid if enough participants consider it valid. The price of a unit of the currency is determined solely by demand due to the absence of government control. This leads to strong price fluctuations.

The most famous cryptocurrency is Bitcoin. It takes a leading position in the penetration of everyday life. For example, it is possible in the canton of Zug to carry out a contribution in kind foundation with Bitcoins.

‍Taxation

‍If income is generated in cryptocurrencies in Switzerland, it is subject to regular income or corporate tax. Cryptocurrency that one owns is subject to wealth tax. However, the question is, how should these currencies be taxed? Since cryptocurrencies have a free exchange rate and are traded on various platforms, there are already differences in rates on different platforms. With Bitcoin, this deviation can be up to 1%. This volatility and the differences in exchange rates make taxation particularly difficult. The Swiss Tax Conference has therefore advocated that these currencies should be taxed like foreign currencies. Accordingly, the relevant value is determined at the end of the year by determining the average price during the year.

‍Further information

‍Private tax declaration made easy – with Taxea.ch

‍You can easily have your private tax return created using our tax app taxea. Learn more about taxea here www.taxea.ch