Hello
So Switzerland is generally considered a BTC tax haven (at least for individuals), since in Switzerland IN MOST CASES (important distinction!) you dont pay any CGT (Capital Gains Tax), and since AFAIK selling of crypto would fall under CGT you dont pay any taxes from the sales of your crypto (Bitcoin etc.). This is at least commonly believed...
BUT (!) from my understanding, which comes from few Swiss redditors i wrote to, and few articles i have read, this applies in MOST CASES, but not at all in ALL cases (!).
In reality there are certain criteria you have to meet in order to NOT pay CGT (capital gains taxes).. The problem is that i believe that the majority (or at least a BIG part) of crypto owners, would NOT (!) be able to meet these criteria and thus WOULD HAVE TO PAY (!) taxes (CGT) on their crypto sales (!). Which was quite surprising realization to me and i believe it will be so to a lot of other people as well... This makes Switzerland really NOT AT ALL a BTC tax haven (!)... So be careful people...
The problem with CGT lies in the distinction between "private investors" and "profesional investors"... If you are classified by the tax man as a "private investor", everything is ok and u dont pay CGT taxes. If NOT, and you are classified as "profesional investor" you pay CGT (!!)...
(AFAIK in this case your income from capital gains counts (adds to) your personal income and is taxed in your personal income (by personal income tax)...
Im basing this on the writings i had with few redditors and few articles i have red, this beeing the best one probably:
https://thepoorswiss.com/capital-gains-switzerland/
From the article:
The federal tax office uses five different criteria for differentiating private investors and professional investors:
1) Private investors should hold securities for at least six months before selling them.
2) Capital gains of private investors do not account for more than 50 percent of their net income.
3) The total volume of transactions (purchases and sales) of a private investor does not account for more than five times the value of the investment portfolio at the beginning of the tax period.
4 Private investors invest with their own money, not with loans.
5) Private investors do not use derivatives (especially options) unless they are for hedging the risks on their securities.
If you tick all of these criteria as a private investor, your capital gains will not be taxed. On the other hand, if an investor does not tick all these rules, he may be considered a professional investor. For people that tick only some of the rules, it will be up to the local tax office to decide whether they are professional investors or not. You would need to violate at least two of these rules to be considered a professional investor in practice.
According to the link, the first 3 are the most important... So basically you are left at the mercy of the tax man, if he wants to or doesnt wants to classify you as a profesional investor... So u are basically at his sole own mercy...
The main problem for crypto people is i believe the 2) one and the 3) one... Since these are QUITE EASILY achievable with crypto, ESPECIALLY in a bull market (where u probably wanna sell; you dont want to really sell in a bear market do u
...). Even the 1st one might be a problem, at least for a certain part of your crypto stash (and im not sure if and how your tax man would differentiate between them or he would even be willing at all)...
So as you may see, the situation is really not that clean and Switzerland might really NOT be at all THAT Crypto tax haven it was once said it is... At least for majority of crypto people (especially those who are actually looking to move their tax domicile in order to optimize their crypto tax...)
My questions are mainly for people in the know - swiss people or people currently residing in Switzerland...
1) Everything i have written is correct and it really works this way...?
2) If you would have to pay the CGT, you pay it in (it adds up to) your personal income tax, correct? What are the personal income tax brackets in Switzerland...? (I found out conflicting information on this on the net)
3) Is there any additional "tax" or whatever you would have to pay on top of the income tax...? I mean especially some additional local (canton or whatever) taxes...? Are there any or you just pay the income tax (which includes the CGT) and thats it, no additional local taxes or surtaxes etc...?
4) Would the tax you pay on your capital gains (which falls into personal income, from which you finally pay the income tax), you would have to pay also some % to health insurance "tax" or social security "tax"...? Would you have to pay health and social security insurance "tax" even from the money that came from selling BTC (classified as profesional investor)....?
Thank you
So Switzerland is generally considered a BTC tax haven (at least for individuals), since in Switzerland IN MOST CASES (important distinction!) you dont pay any CGT (Capital Gains Tax), and since AFAIK selling of crypto would fall under CGT you dont pay any taxes from the sales of your crypto (Bitcoin etc.). This is at least commonly believed...
BUT (!) from my understanding, which comes from few Swiss redditors i wrote to, and few articles i have read, this applies in MOST CASES, but not at all in ALL cases (!).
In reality there are certain criteria you have to meet in order to NOT pay CGT (capital gains taxes).. The problem is that i believe that the majority (or at least a BIG part) of crypto owners, would NOT (!) be able to meet these criteria and thus WOULD HAVE TO PAY (!) taxes (CGT) on their crypto sales (!). Which was quite surprising realization to me and i believe it will be so to a lot of other people as well... This makes Switzerland really NOT AT ALL a BTC tax haven (!)... So be careful people...
The problem with CGT lies in the distinction between "private investors" and "profesional investors"... If you are classified by the tax man as a "private investor", everything is ok and u dont pay CGT taxes. If NOT, and you are classified as "profesional investor" you pay CGT (!!)...
(AFAIK in this case your income from capital gains counts (adds to) your personal income and is taxed in your personal income (by personal income tax)...
Im basing this on the writings i had with few redditors and few articles i have red, this beeing the best one probably:
https://thepoorswiss.com/capital-gains-switzerland/
From the article:
The federal tax office uses five different criteria for differentiating private investors and professional investors:
1) Private investors should hold securities for at least six months before selling them.
2) Capital gains of private investors do not account for more than 50 percent of their net income.
3) The total volume of transactions (purchases and sales) of a private investor does not account for more than five times the value of the investment portfolio at the beginning of the tax period.
4 Private investors invest with their own money, not with loans.
5) Private investors do not use derivatives (especially options) unless they are for hedging the risks on their securities.
If you tick all of these criteria as a private investor, your capital gains will not be taxed. On the other hand, if an investor does not tick all these rules, he may be considered a professional investor. For people that tick only some of the rules, it will be up to the local tax office to decide whether they are professional investors or not. You would need to violate at least two of these rules to be considered a professional investor in practice.
According to the link, the first 3 are the most important... So basically you are left at the mercy of the tax man, if he wants to or doesnt wants to classify you as a profesional investor... So u are basically at his sole own mercy...
The main problem for crypto people is i believe the 2) one and the 3) one... Since these are QUITE EASILY achievable with crypto, ESPECIALLY in a bull market (where u probably wanna sell; you dont want to really sell in a bear market do u
...). Even the 1st one might be a problem, at least for a certain part of your crypto stash (and im not sure if and how your tax man would differentiate between them or he would even be willing at all)...So as you may see, the situation is really not that clean and Switzerland might really NOT be at all THAT Crypto tax haven it was once said it is... At least for majority of crypto people (especially those who are actually looking to move their tax domicile in order to optimize their crypto tax...)
My questions are mainly for people in the know - swiss people or people currently residing in Switzerland...
1) Everything i have written is correct and it really works this way...?
2) If you would have to pay the CGT, you pay it in (it adds up to) your personal income tax, correct? What are the personal income tax brackets in Switzerland...? (I found out conflicting information on this on the net)
3) Is there any additional "tax" or whatever you would have to pay on top of the income tax...? I mean especially some additional local (canton or whatever) taxes...? Are there any or you just pay the income tax (which includes the CGT) and thats it, no additional local taxes or surtaxes etc...?
4) Would the tax you pay on your capital gains (which falls into personal income, from which you finally pay the income tax), you would have to pay also some % to health insurance "tax" or social security "tax"...? Would you have to pay health and social security insurance "tax" even from the money that came from selling BTC (classified as profesional investor)....?
Thank you
.
. Switzerland is no tax haven at all and Geneva is VERY high tax. When you add you 11% federal tax on 210k plus 17% Kantonal tax for Geneva then your AHV, LHV etc then you end up with that rate quit quickly....lol. The only place to live there to lower taxe is in Kanton Schwyz which is what I did once upon a time.
