This guide introduces you to how cryptocurrencies are taxed in Switzerland, France, Germany and Belgium, and how they should be declared your tax return.
March 22nd 2023
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In Switzerland, you must declare any amount of any cryptocurrency (NFTs included) that you own, wherever they are stored and without exceptions.
What you need to report is the amount held on December 31st and the CHF value at the same date. The Swiss fiscal administration provides that value for the main cryptos here, but for the smaller ones you will have to find it yourself (you can easily do so on Kraken here).
In principle, it is usually acceptable to declare the total value of your crypto holdings without reporting the detail.
In Switzerland, tax declarations are made at the cantonal level and each canton provides different tax tools. Some of them will have a section for cryptocurrencies, in which case you should simply use it. For those that don't, you can either report your crypto in the wealth section, either in the securities section. If your cryptos generate a yield (staking, mining, etc.), you should report them as securities.
Capital gains for individuals are exempt from tax. However, if you are more than a casual investor/miner you might be qualified as a professional (activité lucrative indépendante) and taxed accordingly. Many factors come into play for that qualification so there is no single answer to how it works, however the tax administration will typically look at your number of trades per day, whether you borrow and leverage funds to trade, and whether the gains from that activity are the main source of income for your living standard or not. More information can be found about that qualification process in the Federal circular no.36.
If you need to convert an important sum of crypto into fiat (to buy a house for instance), you will need to justify the origin of those funds and their tax compliance. If you've never declared them before, you can do a «spontaneous denunciation» procedure (this is a once in a lifetime trump card) that will spare you fines, although you will need to pay taxes and interests retroactively of course.
The MPS token is the actual share of Mt Pelerin Group SA. Therefore, you should declare and report it in your tax return the same way as you would for the ownership of the shares of any other non-public limited company.
Each year, we communicate the fiscal value of the MPS by email to registered shareholders, which is determined by our Swiss cantonal administration. That value must be used to declare your tokens in the shares or securities section of your tax report.
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The French fiscal regime for cryptocurrencies in effect since January 1st 2019 with the PACTE PLF law taxes gains realized when a cryptocurrency is converted into a fiat currency (CHF, EUR, etc.) with a 30% flat rate called “Prélèvement forfaitaire unique”.
Crypto to crypto operations are not taxed, including stablecoin operations. Therefore, only crypto-to-fiat transactions that you've made within a fiscal year must be reported and you will only be taxed if the final result between your gains and losses is positive.
Since the process of keeping track of all your crypto-fiat operations can be extremely tedious, we highly recommend you to use Waltio, a platform that will help you automate most of your crypto declaration in France.
For shares France applies the same principle of taxing gains, with the addition of taxing dividends as well. Since MPS tokens don't pay dividends yet, you can simply ignore that part. What you will need to declare are the gains made if you've sold MPS tokens and converted those gains into fiat.
At the moment, Belgium doesn't have a clear regulation for the taxation of cryptocurrencies yet. The overall principle is that gains realized on cryptocurrencies should be taxed, however that will depend whether the tax administration puts you into one of these 3 categories:
Although this point hasn't been fully clarified yet, Belgium should only tax gains made on crypto-to-fiat transactions, just like in France.
Since the process of keeping track of all those operations can be extremely tedious, we highly recommend you to use Waltio, a platform that will help you automate most of your crypto declaration in Belgium.
In Germany, profits from cryptocurrencies are taxed. According to the Federal Ministry of Finance, cryptocurrencies such as Bitcoin and Ethereum do not count as official means of payment, but are classified as "other economic assets". The taxation of crypto profits is therefore similar to that of stock profits. However, the final withholding tax does not apply to gains from cryptocurrencies. Instead, only the income tax applies, which varies individually depending on the income level and can amount to up to 42%. In addition, solidarity surcharge and church tax may have to be paid.
There is also a special feature in the taxation of cryptocurrencies under German law: trading in cryptos is classified as a private sale transaction, similar to works of art or gold. Therefore, there is a speculation period of one year. If cryptocurrencies are held for at least one year, gains from their sale are tax-free.
Source: Wendl & Köhler
In addition, there is an exemption limit of €600 per year. If the profit from the sale of cryptocurrencies is less than €600, no taxes are due. However, if the profit is more than €600, income tax are due on the entire profit realized.
In the tax return, profits or losses from crypto trading must be stated in the annex SO ("Other income"). There, the acquisition date and the disposal date must also be stated in order to be able to track the profit or loss. In addition, the acquisition and disposal costs and the profit or loss determined as a result must be stated. Losses from the sale of cryptocurrencies can be offset against gains in the same year.
As a private investor, the same rules apply to the sale of NFTs as to the sale of cryptocurrencies: if the profit from the sale of NFTs is less than €600 or if the sale is made more than one year after the purchase, the profits are tax-free.
However, if you have created the NFT yourself and sold it on an NFT marketplace, the profits can be considered artistic income and are then subject to the Income Tax Act. If the profit exceeds a certain amount, sales tax must be paid in addition to the crypto tax. However, an NFT artist can also benefit from the small business rule as long as he or she has earned less than €22,000 in the previous year and is below €50,000 in the current year. In this case, sales tax does not apply and artists are also exempt from trade tax.
The holding period for staked cryptocurrencies to be sold tax-free decreases from 10 years to 1 year. Previously, staking resulted in the holding period being increased from 1 year to 10 years, which meant that tokens could only be sold tax-free after 10 years. However, the German Federal Ministry of Finance has repealed this regulation, meaning that the holding period of cryptocurrencies is no longer extended by staking. Even with lending or staking, cryptocurrencies like Bitcoin are tax-free if they are sold after more than one year.
Source: PC Magazine