An Attractive Tax Framework
The Swiss Federal Department of Finance (FDF) has recently concluded in its final report to the Federal Council that there is no general need to adjust the Swiss tax law framework.
In its report the FDF outlines the efficacy and appropriateness of the current framework. In particular, it’s reasoning regarding security transfer taxes and withholding taxes seem reasonable in the light of ongoing general revision works of these law codes and general considerations concerning the location attractiveness of Switzerland.
In the area of value-added taxes more clarity and guidance by the Federal Tax Administration would be appreciated.
Nevertheless, this report proves another time the general attractiveness of Switzerland for doing crypto business activities.
Tax Advantages For A Crypto Business
Summarized, the main advantages from a tax perspective are:
- Advance tax ruling practice
- Low effective income tax rates of 8 – 24% depending on location
- Deferral of income for ICO-funded projects
- Lowest VAT rate in Europe with 7.7%
- No VAT on BTC transactions and transactions with other cryptocurrencies
- No stamp duty or securities transfer tax on tokens which do not formally represent equity, debt or collective investment schemes
- No securities transfer tax on transactions without the involvement of a Swiss securities dealer (e.g. on transactions on smart-contract-based, decentralized exchanges)
- No withholding tax on profit-sharing payments related to tokens which do not formally represent equity, debt or collective investment schemes