Chapter 8
This guide introduces you to how cryptocurrencies are taxed in Switzerland, France, Germany, Belgium, Spain and Italy, and how they should be declared in your tax return.
20 minutes|Yann Gerardi|Published 2023-03-22|Updated 2024-09-03
Disclaimer: The content of this page is provided for informational purposes only and does not constitute legal or tax advice. For tax advice and other related services, please contact a qualified professional. Furthermore, while we make every effort to keep the information provided up to date, we cannot guarantee the same because government tax practices may change without our knowledge. We are not liable for any decisions or actions you take based on the information presented on this page.
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.
Fill the form below for a free consultation with Swiss specialized firm CLARK:
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.), or more generally into anything that is not a cryptocurrency (when buying goods or services for instance) with a 30% flat rate called “Prélèvement forfaitaire unique” or flat-tax.
Crypto to crypto operations are not taxed, including stablecoin operations. Therefore, only crypto-to-fiat or crypto-to-goods/services 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.
Sources: Wendl & Köhler, Wirtschaftslexikon Gabler
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.
Source: WirtschaftsWoche
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.
Source: GTK
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
In Italy, the primary tax authority is the Agenzia Delle Entrate (Italian Revenue Agency). They provide limited guidance on how cryptocurrencies should be treated for tax purposes.
Before 2023, the foundational principle in Italy was to treat cryptocurrencies similar to foreign currencies and as such, this led to some uncertainty. Individuals were subjected to 26% capital gains tax on miscellaneous income, which was applied only if the total value of crypto holdings exceeded €51,645.69 for more than seven consecutive days. This threshold, along with the lack of specific regulations, created uncertainty for Italian crypto investors.
However, by December 2022, Italy updated their crypto regulations for the 2023 budget announcement. Recognizing the growing importance of cryptocurrencies, the Italian Revenue Agency introduced a more comprehensive framework.
This framework states that Italian crypto taxpayers are expected to pay 26% capital gains tax on all crypto-related profits exceeding €2,000. This tax is not limited to profits but also applies to a broader range of transactions, including selling crypto, converting it to fiat currency, and using it to pay for goods or services. It also creates room for individuals to deduct losses from crypto that is over €2,000 to offset profits and carry losses forward.
For crypto holders, the Italian tax system offers an alternative to the capital gains tax. By choosing it, Italian taxpayers declare the total value of their digital asset holdings on the 1st of January each year and pay a flat tax of 14% on the declared value. This option simplifies the tax process for those who hold crypto for long-term investment purposes.
Regardless of the amount of cryptocurrency held by Italian taxpayers, they are expected to report their cryptocurrency holdings and transactions in their annual tax returns. This aims to increase transparency and prevent the evasion of tax within the crypto ecosystem. Failure to accurately report these transactions can result in penalties (a fixed sum or a percentage ranging to 120% to 240% of the amount of unpaid tax).
If individuals use their cryptocurrencies to generate other forms of income (such as: staking rewards, mining crypto), the income is typically subject to ordinary income tax rates.
Cryptocurrencies are considered as “intangible assets” and are therefore included in a company's financial statements under intangible fixed assets.
The following taxes are applicable to Italian companies active in cryptocurrency:
There's no clear instructions regarding record keeping for cryptocurrency, but individuals and investors need to keep up to date records in the event of an audit. The record should include the following:
Italian crypto tax filing forms
There are two types of forms that can be used to file for tax. Each form has its own deadline and is dependent on the nature of the taxpayers income. They include:
The recent update to Italy's crypto tax system shows a positive step towards clarity and efficiency. The clear guidelines on capital gains taxation provide a degree of certainty for individual investors. Also, the exemption from VAT for cryptocurrency exchanges reduces the complexity of transactions.
However, the changes still holds challenges for taxpayers. The high capital gains tax rate of 26% can be a burden for investors, especially those who trade frequently or hold large amounts of cryptocurrencies.
Italy's crypto tax system is a work in progress. It reflects the country's effort to embrace and integrate cryptocurrency into its financial and tax framework.
While challenges persist, the recent update shows that Italy can create a refined and efficient system that will foster innovation while ensuring clarity and fairness in the taxation of digital assets.
The regulations pertaining to cryptocurrency taxes in Spain are set by the national tax authority, the Agencia Estatal de Administración Tributaria (AEAT), which considers cryptocurrencies as taxable assets rather than currencies.
As a result, profits and losses from cryptocurrency-related transactions are taxable in Spain.
People are required to record any capital gains or losses that arise from the sale, exchange, or use of cryptocurrencies for purchases of goods or services. The difference between the buying price and the selling price is used to compute the gain.
The progressive capital gains tax rate, which ranges from 19% to 28% as of 2023, will apply. These gains are taxed under the Spanish income tax system (IRPF).
Earnings from mining or staking are classified as income and taxed accordingly. Cryptocurrencies are seen as income if you get paid with them for goods or labor. At the moment of receipt, this income must be recorded in euros at its fair market value. The general income tax rates, which are progressive, are applied to this income.
Businesses involved with cryptocurrencies, including exchanges and companies accepting crypto payments, are subject to corporate tax in Spain. The standard corporate tax rate is 25%, though the effective rate may differ depending on specific conditions and eligible deductions.
People can be liable to pay wealth tax if the entire value of their assets, including cryptocurrency holdings, surpasses specific criteria (such as €700,000 in certain areas). The value of cryptocurrencies on December 31 of the tax year, should be included in the wealth declaration.
In 2015, the European Court of Justice ruled that cryptocurrency exchanges are not subject to VAT, which is also applied in Spain. On the other hand, using cryptocurrency to pay for products or services remains subject to VAT.
Keep a thorough documentation of every cryptocurrency transaction, including dates, quantities, and the values in euros at the time of the transaction, as well as the purposes (such as purchase or sale).
For every transaction, ascertain the acquisition price (cost basis) and the sale price. Determine the gain or loss on capital for every transaction.
Make sure to include all capital gains or losses in the appropriate income tax return area. If appropriate, report any cryptocurrency-related revenue under the income column.
If you own more than €50,000 in cryptocurrencies overseas, fill out and submit Form 720. Send in Form D-6 if necessary.
In Spain, cryptocurrencies are treated as an asset for taxation purposes. This implies that capital gains tax (CGT) is applied to the profits made from mining as well as from the purchase and sale of cryptocurrencies. For gains realized within a year after acquisition, the precise tax rate might range from 19% to 23%, depending on the taxpayer's total income.
Gains from cryptocurrency sales or exchanges that are held for more than a year are exempt from tax in Spain. As long as the total gains from transactions are less than €6,000 per year, gains from holding periods longer than a year are not subject to taxation. This exemption is not based on specific transactions, but rather on accumulated gains.
You may deduct losses from crypto transactions against any gains you make during the same tax year. This covers losses incurred from trading cryptocurrencies as well as other large-scale investments. Losses that exceed profits in a particular year may be carried forward to reduce gains in later years.
Every year, transactions involving cryptocurrencies must be disclosed in the tax return. The "Gains and Losses from Capital Assets" part (Ganancias y Pérdidas Patrimoniales) of the tax return (Form 100 for personal income tax) is where crypto trading gains and losses must be reported. Details like purchase and sale dates, purchase expenses, sale profits, and net gains or losses must be included.
Under Spanish tax legislation, there may be extra reporting requirements if cryptocurrency holdings are kept on international exchanges or wallets. This entails declaring foreign income and assets in the relevant tax return sections (Modelo 720).
In Spain, NFTs are handled much like cryptocurrencies. The same regulations that apply to other digital assets also apply to profits from the selling of NFTs. As long as NFTs satisfy the requirements set forth by the tax authorities, they are also eligible for the exemption from profits after a year of possession.
Cryptocurrency-related income from staking or lending is subject to taxes. Whether the income is regarded by Spanish tax law as capital gains or as other taxable income determines how much is taxed. It has been made clear by recent upgrades that staking rewards are taxed at the time of receipt rather than always when the staked cryptocurrency is sold.
Taxpayers can use the AEAT's tax filing software or speak with tax consultants experienced in crypto taxes to ensure proper reporting and compliance with Spanish tax rules. It is possible to compute taxable gains or losses from bitcoin transactions with the use of tools like online capital gains calculators.
Failure to comply with crypto tax obligations may result in penalties, fines, or legal action by tax authorities. Maintaining precise records and truthful reporting of crypto transactions is crucial.
Through adherence to these recommendations and making sure that crypto transactions are accurately reported in tax returns, taxpayers can optimize their tax liabilities in accordance with Spanish tax legislation and meet their tax obligations (Tax Form 100 (IRPF)).
About the author
Yann is the head of marketing of Mt Pelerin. He fell down the rabbit hole of crypto at the end of 2017, when he joined the assembling team that would give birth to Mt Pelerin.
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