Correct taxation for cryptocurrency
To date, the tax rules for cryptocurrencies such as Bitcoin and the like have not been clearly defined. The canton of Zurich has now published a compact practical guide, while the cantons of Lucerne and Zug have released similar information. In particular, there are differences of opinion regarding the valuation of the currency, whereby each canton uses different tax bases.
The key facts from the communication from the tax office for the canton of Zurich
- Credit balances held in cryptocurrencies are subject to wealth tax. These must be declared as “other credit balances” in the schedule of securities and assets.
- Proof must be provided in the form of a printout of the digital wallet.
- The Federal Tax Administration (ESTV) publishes a year-end tax rate for the assessment of bitcoins. Other cryptocurrencies must be declared at their year-end price on the most common stock exchange platform for the respective currency.
- The mining of cryptocurrencies via the provision of computing power for a fee by a natural person gives rise to taxable income from self-employment.