Crypto Business Incentives

Cryptocurrencies Taxation

Following significant domestic and international interest, Switzerland has taken steps to establish itself as a pioneer in terms of cryptocurrency legislation and initiatives in order to promote this technology. While some changes on a federal level were discussed previously, this section will instead focus on certain cantonal developments.

For further information on the treatment of cryptocurrencies please refer to V. INDIVIDUAL TAX section for individuals and the VIII. CORPORATE TAX section for companies.

Zug (ZG)

This small canton has been at the forefront of Swiss crypto-friendly innovation, attracting the future giant Ethereum Foundation back in 2014 and accepting payments for municipal services since 2016. Its small size, close to Zurich, and low taxes (lowest in the country) have made it the perfect place to foster Swiss crypto development.

In 2017, the Crypto Valley Association was formed. It is led by five board members representing different organizations and/or businesses involved in the crypto community and aims to provide guidance and help coordinate the further advancement of the technology and implantation in Zug and Switzerland.

Together with other towns in Switzerland such as Zermatt and Chiasso, the canton of Zug has been accepting tax payments in cryptocurrencies as early as 2016, but only partially (up to a set limit). In February 2021 however, the canton of Zug has gone a step further and allowed taxpayers to settle the entirety of their tax bills in Bitcoin or Ethereum.

Now, the Valley boasts 14 companies with valuations counted in USD billions. In fact, the top 50 companies established there have an estimated cumulative worth of USD 611.8 billion.

Neuchâtel (NE)

Although more discreetly than Zug, this French-speaking canton in north-western Switzerland has also been showing its own crypto ambitions.

The cantonal bank being an early and eager adopter of crypto, the efficiency and willingness of the cantonal authorities to help crypto entrepreneurs has made Neuchâtel an attractive location. Even though it isn’t home to any unicorns (companies valued above USD 1 billion) yet, some promising projects are in development, making this canton a place of potential growth.

Lugano, Ticino (TI)

Recently, Lugano, the largest city in the Italian-speaking canton of Ticino, has been searching for its own role to play in Switzerland’s crypto development. Particularly interested in stablecoins, the city has issued its own stablecoin called Luga (LVGA), which is tied to CHF, and has also announced a partnership with one of the main stablecoins on the market, Tether.

Soon, Bitcoin, Tether, and Luga will be considered legitimate means of payment for taxes, parking fines, all public services, tuition fees, and more. The city hopes that the fact that these stablecoins are tied to the local currency will help convince skeptics. Lugano also seeks to address the environmental concerns many people opposed to crypto have, pledging to support research on sustainable mining.

Lugano is going further than any other Swiss city had gone before in terms of crypto acceptance on a municipal level, and this daring decision is one to watch going forward.

Zurich (ZH) & Bern (BE)

Both Cantons have issued their practice regarding the mining activity. Such activity have to be considered as a professional activity, subject to social insurance too. At the opposite of Zurich and Bern, note that other Cantons (e.g. Zug) proceed to an in-depth analyze on a case-by-case basis before qualifying the mining as an independent activity.