Taxation of cryptocurrencies: update of the SFTA Working Paper

Martin Burri
Director Tax & Legal Services, PwC Switzerland

On 14 December 2021, the Swiss Federal Tax Authority (SFTA) published an updated version of the working paper on the taxation of cryptocurrencies. It replaces the working paper first published in 2019. At the time, Switzerland was one of the few countries that had published guidelines on the taxation of digital assets. The updated working paper takes into account developments in the crypto sector over the past two years and an ever-increasing investor interest in cryptocurrencies and blockchain technologies.

In particular, the updated working paper includes the following additions and adjustments that we believe are worth mentioning.

Investment tokens with participation rights

According to the first version of the working paper, investment tokens were differentiated into debt tokens, equity tokens and participation tokens. The latter two categories have now been combined into the category ‘Investment tokens on a contractual basis’. In addition, there is now a category called ‘Investment tokens with participation rights’, which reflects the so-called Distributed Ledger Technology (DLT) securities in accordance with the new Federal Law on the Adaptation of Federal Law to Developments in the Technology of Distributed Ledgers (DLT Law), which came into force on 1 August 2021.

Investment tokens with participation rights are to be treated as shares or participation certificates for tax purposes. This means that a distribution is considered a dividend and is consequently subject to withholding tax of 35%. In addition, the issuance of such tokens is subject to the issuance stamp tax.


If own tokens are provided as collateral in a Proof of Stake mechanism (‘Staking’), a return in the form of a token (or part of a token) is paid to the token holder. This compensation can be made either with the same token or with another token. The income from the Staking qualifies as income from movable assets for tax purposes and, in the case of an individual, is subject to income tax pursuant to Art. 20( 1) of the federal tax law. If a token holder receives cryptocurrencies via airdrop (i.e. by allocation of free tokens without any action on the holder’s part), then these are taxable as income from movable assets at the time of allocation at fair market value.

Employee Participation

The updated working paper explains that ‘investment tokens on a contractual basis’ issued to employees and utility tokens do not qualify either as artificial or as non-artificial employee participation under Art. 17b(1) of the federal tax law. This is because the exchange of services for these tokens is based on a contractual relationship and the tokens do not represent participation rights as such. The free or discounted distribution of ‘investment tokens on a contractual basis’ and utility tokens to employees constitutes other non-cash benefits within the meaning of Art 17(1) of the federal tax law, thus subject to income tax to the extent of the difference against the market value.

In a nutshell

The updated working paper with the new specifications is to be welcomed. It creates increased legal certainty from a tax perspective, especially for companies in the crypto sector and for crypto investors. The attractiveness of Switzerland as a crypto location is thus further strengthened.


Contact us

Martin Burri

Martin Burri

Partner, Tax & Legal Services, PwC Switzerland

Tel: +41 58 792 45 00

Julia Stoecklin

Julia Stoecklin

Manager Tax & Legal Services , PwC Switzerland

Tel: +41 58 792 21 71