Our valued sponsor

Switzerland... Not really a BTC tax haven AT ALL... (?!)

Horeskal

New member
Dec 20, 2021
29
10
3
37
Europe
Visit site
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:



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
 
1) Everything i have written is correct and it really works this way...?

Yes. Same information I told my friend unfortunately.

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)

Yes. Tax calculator below may give rough idea depending on your Kanton.


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...?

See above calculator.

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)....?

Krankenkasse (health insurance) you pay for privately or employer gives you. Btw you must have this else police will be at your door as was my case when I lived there.


I had a friend who had a buy and hold crypto strategy never sold anything but converted between cryptos. This was sadly a taxable event by doing so as he didn't know. Plus it was his only means of income so he will be considered a professional investor for 2021. Unfortunately he does not want to hear from me this sort of bad truth :confused:.

P.S Switzerland is not a tax haven - that's a myth. They have a progressive personal income tax system that is quite high in my opinion.
 
  • Like
Reactions: AMD
P.S Switzerland is not a tax haven - that's a myth. They have a progressive personal income tax system that is quite high in my opinion.
Yes, I'm not sure who came up with the idea that Switzerland is a tax haven. Compared to most of its European peers, it's lower tax but it's no tax haven.

Unless you are very wealthy and can negotiate a personal deal for lump sum tax with the tax office, or unless you can structure your capital gains described above to avoid CGT.
 
Yes. Same information I told my friend unfortunately.



Yes. Tax calculator below may give rough idea depending on your Kanton.




See above calculator.



Krankenkasse (health insurance) you pay for privately or employer gives you. Btw you must have this else police will be at your door as was my case when I lived there.


I had a friend who had a buy and hold crypto strategy never sold anything but converted between cryptos. This was sadly a taxable event by doing so as he didn't know. Plus it was his only means of income so he will be considered a professional investor for 2021. Unfortunately he does not want to hear from me this sort of bad truth :confused:.

P.S Switzerland is not a tax haven - that's a myth. They have a progressive personal income tax system that is quite high in my opinion.
Correct. If your friend had a full time job, he eventually could have some luck but as he did not, he will be rekt and eventually the tax office might even claim self-employment and adding a nice 15% on top of tax for all the social welfare programs. Someone needs to fund their fast growing state and socialist sector after all.

The only way to do this halfway correctly is to form a local company and trade/stake etc within that company. The company shall be based in the low tax areas paying around 8% income tax combined of income and cgt. The owner shall pay himself the smallest salary acceptable and paying the social security only on that part instead of the whole amount which the company made. The owner can also live where ever and does not need to live in these somewhat remote and isolated areas.
It needs no further explanation this is not feasible for trading 100k$/yearly but it should be a lot more to even consider this.
 

Martin Everson:​


Thank you, that situation with your friend is quite "sad", how he ended up like that...? Didnt he do a proper research before moving to Switzerland...?


JackAlabama:​


So the social security is 15%...? And you pay it even from the CGT (added to personal income...?) from the whole ammount...??

Because i would have to be self imployed... My home country im self employed (im basically a freelancer, digital nomad (but i dont traveler)... I work for abroad clients... if i would move to Switzerland (which i dont plan anymore finding out all this :) ). I would have to be self employed again... (thats my regular monthly income), i dont have "regular jobs", not an employe... So i would definitelly need some sort of "self employed" status in Switzerland...

In this case i would have to pay CGT tax included in my personal income tax (whatever that would be - quite high probably) + i would have to pay (on top of the income tax (+CGT) also 15% (!!!) "tax" on social insurance...? Even from the ammount i obtained via selling of crypto...?

EDIT:
So i just lolled hard... if i understand it correctly, according to this calculator:


Lets say i choose geneva (because i dont know... its a big city, i want a big city), am around 30 years, single, no kids, i make a ONE TIME SELL OF CRYPTO, only once, lets say worth 2,5 milion EUR... Im classified as profesional investor cause i dont meet the criteria to be classified as a "private investor", so "profesional investor" it is... Im self employed, i dont know, lets say im a programmer who works for different clients abroad (US), "freelancer". So i need a "self employed" status correctly? My monthly profits from my regular activity is lets say 2000 EUR... My crypto sales is 2,5 mil EUR (divide it by 12 months), and i get 203 888 EUR per month of income...+2000 EUR from my regular monthly activity ("job") = Total 210 333 EUR per month revenue... Well... Profit really... Lets also say 1 EUR = 1 CHF...
Now i put that (210 333 CHF per month) into that calculator and it gives me a tax of...:

37.68%​


lol!!!!

Is that right...?

Now if i would be self employed (which i would need for my regular monthly activity - programming for abroad), than i would have to pay (as someone wrote) 15% social insurance "tax"... And that would be on top of that 37,68%...!??!


So i would have to pay in total 37,68% (which is HIGH as fock on itself) 52,68%.... !?!?

LOL like really...?

Swiss tax haven my a*s !! :-D

Incredible people in crypto space keep throwing arouns Switzerland as a legitimate option for them to move their taxes to... :-D!

LOL
 
Last edited:
  • Haha
Reactions: Martin Everson
Something is wrong, the 37,68% you calculate shall include the 15% health care.

On the other hand, what you pay in tax depends on the Cantone you choose to live in and how you structure your live and tax there. As mentioned above, if you have a full time job different from crypto you will higher your chances with 80%
 

37.68%​


lol!!!!

Is that right...?

Now if i would be self employed (which i would need for my regular monthly activity - programming for abroad), than i would have to pay (as someone wrote) 15% social insurance "tax"... And that would be on top of that 37,68%...!??!


So i would have to pay in total 37,68% (which is HIGH as fock on itself) 52,68%.... !?!?

LOL like really...?

Swiss tax haven my a*s !! :-D


Yup......lol...I tried to warn you rof/%. 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.



Incredible people in crypto space keep throwing arouns Switzerland as a legitimate option for them to move their taxes to... :-D!

Most of them are naive unfortunately.
 
what about Zug that's where most foreigners live ?

Zug is good also tax wise compared to other Kantons.

Btw here is official tax calculator below:

 
Something is wrong, the 37,68% you calculate shall include the 15% health care.

On the other hand, what you pay in tax depends on the Cantone you choose to live in and how you structure your live and tax there. As mentioned above, if you have a full time job different from crypto you will higher your chances with 80%

Are u sure that part of that 37,68% is also Health tax...? The other guy here didnt mentioned anything about health tax...?

(even if its health tax), i would still need to pay it in my case right...? So it really doesnt matter

Would i have to pay also the social security as someone wrote...? So that would be 37,68% + 15 % (social security) = 52,68%?
 
I have been following all the discussions around relocating to Switzerland for a year or two here on OCT.

Now I went to the tool @Martin Everson linked to. and entered my data, they are anonymous so I don't have paranoia, is this true, only roughly 7000 CHF to be paid per year?

P1
P2

Further information can be found under Details
Gross income
60’000
0

Contributions to OASI, disability insurance, compensation for loss of earnings
3’180
0

Unemployment insurance contributions
660
0

Non-occ. accident ins. contributions
240
0

Further information can be found under Non-occ. accident ins. contributions
Pension fund contributions
2’571
0

Net income
53’349
24’000

Income
Canton
Confederation
Net salary, main occupation
53’349
53’349
Other income
24’000
24’000
Other professional expenses, main occupation
-2’000
-2’000
Insurance premiums and interest on savings capital
-8’800
-5’000
Deduction for child care by own parents
-12’000
0
Deduction for rental tenants
-5’802
0
Deduction for children
-24’000
-13’200
Deduction for married taxpayers
-22’400
-2’700
Taxable income
2’347
54’449
Applied tax multipliers
Value
Income for cantonal tax
80.00%
Assets, canton
80.00%
Income for communal tax
52.92%
Assets, commun
52.92%

Also if my wife earns 24,000 CHF per year it is almost tax free, she only have to pay 1600 CHF from that per annum in taxes?
 
  • Like
Reactions: JohnLocke
If that is true I will relocate now!

You earn 60.000 CHF and your Wife 24,000 CHF per year you have 2 children's and are married, right?
 
I have been following all the discussions around relocating to Switzerland for a year or two here on OCT.

Now I went to the tool @Martin Everson linked to. and entered my data, they are anonymous so I don't have paranoia, is this true, only roughly 7000 CHF to be paid per year?

P1
P2

Further information can be found under Details
Gross income
60’000
0

Contributions to OASI, disability insurance, compensation for loss of earnings
3’180
0

Unemployment insurance contributions
660
0

Non-occ. accident ins. contributions
240
0

Further information can be found under Non-occ. accident ins. contributions
Pension fund contributions
2’571
0

Net income
53’349
24’000

Income
Canton
Confederation
Net salary, main occupation
53’349
53’349
Other income
24’000
24’000
Other professional expenses, main occupation
-2’000
-2’000
Insurance premiums and interest on savings capital
-8’800
-5’000
Deduction for child care by own parents
-12’000
0
Deduction for rental tenants
-5’802
0
Deduction for children
-24’000
-13’200
Deduction for married taxpayers
-22’400
-2’700
Taxable income
2’347
54’449
Applied tax multipliers
Value
Income for cantonal tax
80.00%
Assets, canton
80.00%
Income for communal tax
52.92%
Assets, commun
52.92%

Also if my wife earns 24,000 CHF per year it is almost tax free, she only have to pay 1600 CHF from that per annum in taxes?
Yes, for that (low level) for Switzerland, the taxes are very low. However you will be confronted with high living cost and high rent if you are able to find something.
It is around 7k income for 2, and from that you pay around 3k in rent alone, which is not luxury living at all.

That being said, depending on you and what connections you have it can be made work.
 
  • Like
Reactions: JohnLocke
So fact is you don't pay that much taxes on Switzerland if you have an income below the 100K CFH - how is it with the life insurance, and insurance for Doctors and Hospital ? Some public available calculator for it? or public available link to do the math?
 
So fact is you don't pay that much taxes on Switzerland if you have an income below the 100K CFH - how is it with the life insurance, and insurance for Doctors and Hospital ? Some public available calculator for it? or public available link to do the math?
Yes, thats correct. Some cantons have a public tax calc.


But paying tax is the least of a problem, rent and general living, socializing cuts more into ones budget.
health cost can also be a very big chunk.
Both have good sources online, both for health insurance which is mandatory and rent or purchasing real estate which is very expensive as well due to some peculiar things.
 

Latest Threads