Swiss Token Sale Taxation

Switzerland is one of the world’s leading ICO hubs due to its crypto friendly nature and advantageous legal conditions. But how are Swiss ICOs actually taxed? This article will provide a quick overview of ICO taxation in Switzerland.

Hanna Keskin
Dec 11, 2018 · 5 min read

In our first two articles, we discussed Swiss blockchain regulation and FINMA’s ICO guidelines. We’ve come to the conclusion that there is still no specific rule for the ICOs in Switzerland, but it is the interpretation of the existing laws that allow a comprehensive understanding how an ICO can be treated. When speaking about ICO taxation, we feel that the same approach needs to be adopted.

It is therefore important to understand that each ICO has its own token economics model, which is why each case must be considered on an individual basis. In this context, tax treatment must be defined according to the category of tokens (payment, utility, security or hybrid). An example of this is our GRG token which is clearly a utility token that provides you with access to the applications built on top of the RigoBlock protocol. When carrying out our taxation research, we had to consider all aspects of the utility token along the way including federal income tax, the cantonal and communal income and capital taxes and value-added taxation etc. Also, we must consider that the treatment is different for a token issuer who organizes the ICO and issues the tokens, an employee who works for the token issuer and an investor who buys the tokens.


For business investors (legal entities, partnerships or sole proprietorships), reference is made to Circular n. 36 from 27 July 2012, in which the Federal Tax Administration (FTA) presented the tax practice on securities trading. Also, article 957 (1)(2) of the Swiss Code of Obligations (CO) about the duty to keep accounts and file financial reports needs to be considered. However, tax treatment might be different for each type of tokens.

  • All gains realized by a business investor by selling a payment token are taxable. On the other hand, the losses can be deducted. The value as of 31st of December must appear on the commercial balance sheet.
  • Utility tokens held by business investors need to be capitalized at its cost by following the usual accounting rules.
  • The tax treatment of security tokens is comparable to a derivative financial instrument. At the moment of investment, no taxes are applied. Each payment made by the issuer to a business investor is treated as taxable income. In the case of resale, the profits are subject to taxation, while losses can be deducted. Furthermore, these payments are not subject to withholding tax.

For private investors (or individuals), reference is made to the tax law provisions on movable private assets as per art. 20 of the Federal Law on the Direct Federal TaxBundesgesetz über die direkte Bundessteuer” (DBG) . Furthermore, reference is made to Circular n. 15 from 3 October 2017 of the Federal Tax Administration which specifies the fiscal practice on bonds and financial derivatives.

  • Generally, payment tokens are treated in Switzerland as foreign currencies. For individuals, profits made from a sale are not subject to the income tax. For the wealth tax declaration, the FTA and some cantonal tax administrations publish an official exchange rate for the most widespread cryptocurrencies as of December 31st. The cryptocurrencies that are not included in the list can be declared at their official market value.
  • The tax treatment of the utility tokens is identical to that of a mandate with an upfront payment and the purchase of the token itself represents a simple expense without any tax implications. By 31st of December, individuals must declare the tokens held in their private “substance”.
  • An investment in a security token by an individual is not subject to any tax. Tokens must be declared in their “substance”. Each payment made by the issuer of the token is assimilated to an income, even if the issuer reimburses the amount initially paid. In the case of a resale, if there is a profit, this capital gain will be exempt from tax, while eventual losses are not deductible.


For employees who have received tokens of the company they work for, reference is made to the tax law provisions on employment income. In particular art. 17a of the DBG on the taxation of employee shareholdings and Circular no. 37 from 22 July 2013 on the taxation of employee shareholders in which the FTA presented the tax practice on qualifying and non-qualifying employee participation. Thus, tokens held by employees of the ICO’s promoter are treated accordingly to an employee income tax.


For a token issuer, reference is made to art. 58 (1) of the DBG, concerning the assessment of taxable income of legal entities. Therefore, the usual procedure must be followed to determine the taxable income. Also, the provision on accrual and the provision on the matching of revenue and cost mentioned in art. 958b of the CO can allow you to have an indication on the accounting treatment of tokens that will be sold. In the case of utility tokens (such as our Rigo “GRG” token), when in fact a revenue is anticipated to the company, these provisions help to establish the way in which the sale of tokens should be accounted. As in the other cases, a tax classification of tokens is required to identify the tax consequences of the token issuer. Also, depending on the legal relationship between the issuer and the investor, it is defined to what extent the issuer of the tokens should be taxed and to which tax the token that has been issued must be subject (as an example a withholding tax, a value added tax or an issuance stamp duty). Therefore, depending on the case, the issuer can be taxed differently.


It is therefore clear that at the dependence of specific characteristics of the ICO, there can be a different taxation. In the next article, the taxation aspects on behalf of the token issuer will be described more detailed. It is essential to clarify this aspect before launching the ICO and require a prior tax ruling from the tax authorities.

Disclaimer: This article does not constitute legal advice. As a co-founder of RigoBlock and following my research on the tax treatment of the token sale in Switzerland, I wanted to share the results which have been collected together in this article.


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