Declaring cryptocurrencies correctly: wallets, staking, DeFi and tax values clearly explained

Basics

Cryptocurrencies in Switzerland are not subject to one single blanket rule. For individuals holding payment tokens as private assets, the general rule is that the holding at the end of the tax period must be declared at fair market value, mere holding generally does not generate taxable income, and gains from purchase and sale are generally tax-free capital gains, while losses are not deductible.

However, as soon as the activity no longer qualifies as private asset management but as self-employed or commercial activity, the tax treatment changes significantly.^1,3

For companies and other situations involving business assets, the logic is stricter. For direct federal tax, natural persons are subject to income tax, whereas legal entities are subject to profit tax.

At the same time, the FTA emphasises the principle of conformity with the financial statements: taxable profit is determined on the basis of the income statement prepared in accordance with commercial law, and expenses not recorded in the accounts cannot be claimed for tax purposes.^1,4

In practice, this means that you must first clearly distinguish whether you hold crypto as a private individual, whether your activity already qualifies as self-employed or commercial, or whether the positions are held in a sole proprietorship, GmbH or AG. Without this classification, most declaration errors arise right at the beginning.¹

Documenting wallets

The tax authorities do not just want to see a total value, but a traceable proof of the holdings. Zurich guidance requires a printout of the digital wallet as at the end of the tax period for cryptocurrencies. This exact traceability is also practically decisive outside Zurich, even if the cantonal input form looks different.³

Your wallets are only properly documented once you can show, for each relevant position, the holding as at 31 December, the designation of the coin or token, the wallet or exchange used, the transaction history and the derivation of the CHF value in a traceable manner.

For self-custody, it is therefore not sufficient simply to estimate a total amount. Conversely, for exchange accounts, a balance without transaction reference is often not sufficient either.

The separation between private and business wallets is particularly important. As soon as private use, entrepreneurial activity and different platforms are mixed, it becomes very difficult later to reconstruct cleanly which holdings belong to private assets, which income has already been realised and which transactions were merely reallocations.

Determining tax values

For the most common cryptocurrencies, the FTA publishes tax values in the ICTax rate list. These rates are generally the closing prices of the last trading day in December.

If rates are missing, the most recently available rates are used; these then apply as the tax value at 31 December. For cryptocurrencies without a published FTA tax value, the FTA allows the market value of a leading trading platform.^1,2

For the tax return, this means in practice that you do not need just any average value from the year, but the correct year-end value for the asset declaration. This must be distinguished from income received during the year. Especially for staking, airdrops or DeFi rewards, it is not the year-end rate that matters, but the value in Swiss francs at the time of receipt.^1,2

A typical mistake is to use the same year-end rate both for the asset declaration and for ongoing income. This is tax-wise incorrect because assets and income have different reference points. For assets, the position at year-end is decisive; for ongoing crypto income, the time of receipt is decisive.^1,2

Staking and DeFi

For staking, FTA practice is comparatively clear. If tokens are made available to a staking pool, the compensation paid generally qualifies as income from movable assets.

The value at the time of receipt, converted into Swiss francs, must be declared. If you do not perform staking through a pool but act as a validator yourself, it must additionally be examined whether a self-employed activity exists.¹

Airdrops are also not simply tax-free just because there is no classic payout in fiat currency. The FTA treats airdrops, at the time of allocation and in the amount of their fair market value, as taxable income from movable assets.¹

You should be particularly careful with DeFi. The FTA expressly states that tax practice must continue to evolve for new constellations. For DeFi protocols, there is therefore no reliable blanket formula along the lines of “everything is tax-free” or “everything is income.”

What matters is the economic function of the individual transaction: is it merely a reallocation of assets, does ongoing income arise, is a new token allocated, or do you acquire a fixed legal claim to a service? This is exactly the point at which DeFi transactions become tax-dependent on the individual case.¹

For declaration purposes, this means: do not wait until year-end when dealing with DeFi. Record swaps, lending transactions, liquidity pool entries and exits, rewards, fees and any token allocations on an ongoing basis. The more complex the protocol, the more important documentation becomes that plausibly shows the receipt, the consideration and the CHF value of each step.¹