How to Correctly Declare Profits from Bitcoin & Other Cryptocurrencies

Cryptocurrencies such as Bitcoin, Ethereum, or Cardano are no longer just a trend. An increasing number of Swiss taxpayers invest in digital assets – yet many are unsure how to declare them in their tax return. Incorrectly reported crypto gains can lead to unpleasant questions or even penalties. This guide explains how cryptocurrencies are taxed in Switzerland.

Cryptocurrencies in Switzerland: Tax Classification

In Switzerland, cryptocurrencies are considered assets. They are treated similarly to bank deposits or securities. The key factor is the value of the coins as of December 31 of the tax year. The Federal Tax Administration (FTA) publishes official annual rates, which must be used for valuation.

Declaration in the Securities and Assets Inventory

All cryptocurrencies must be listed in the securities and assets inventory, including:

• Number of coins as of December 31
• Name of the cryptocurrency (e.g., Bitcoin, Ethereum)
• Tax value according to the FTA rate list
• Custody or wallet proof (e.g., exchange statements or wallet screenshots)

Even if your coins are stored in a foreign wallet, they must be fully declared.

Trading Gains: Income or Tax-Free?

Private Asset Management

Good news for private investors: Gains from pure cryptocurrency trading are generally tax-free. They do not need to be declared as income, as long as the activity qualifies as private asset management.

Professional Trading

However, those who trade very actively or meet certain criteria may be classified as professional traders. In this case, gains are taxable income. Criteria may include:

• Very high trading volumes
• Short holding periods (e.g., day trading)
• Use of borrowed funds (loans)
• Use of derivatives or leveraged products

If several of these conditions apply, the tax office may classify profits as income from self-employment. This would make them subject not only to income tax but also to social security contributions (AHV/IV/EO).

Staking, Mining, and Airdrops

• Staking: Rewards from staking are considered taxable income and must be declared under “other income” in the tax return.
• Mining: Mining income is also considered taxable income. Depending on the scale, mining can be classified as a commercial activity.
• Airdrops: Coins received free of charge (e.g., through marketing campaigns) are taxable and must be declared as income.

Losses and Price Fluctuations

Losses from cryptocurrency trading cannot be deducted from taxable income. They only affect net asset development. The decisive factor remains the balance of coins as of December 31.

Documentation: No Proof, No Recognition

The tax office often requests proof of crypto holdings and transactions. Therefore, you should keep the following documents:

• Annual account statements from crypto exchanges (e.g., Binance, Kraken, Coinbase)
• Wallet screenshots showing balances
• Full transaction history for frequent traders

Clean documentation makes filing easier and helps avoid disputes with the tax authorities.

Conclusion: Transparency is Key

In Switzerland, cryptocurrencies must be declared just like other assets. Gains from private trading are usually tax-free, while mining, staking, and airdrops are taxable. The complete declaration in the securities and assets inventory and proper documentation are essential. Staying organized early saves time and helps avoid conflicts with the tax office.