Paying taxes in bitcoin in Switzerland

Settling your tax bill in bitcoin sounds like Crypto Valley folklore, but in two places in Switzerland it is routine: the Canton of Zug and the City of Lugano. Both use the same payment provider, Bitcoin Suisse, and both end up receiving Swiss francs. The tax office never holds crypto; it simply gets its money a day later. Elsewhere the route is longer, and for some early pioneers it is unclear whether the option still exists.

The converter above shows how much bitcoin a given franc amount is worth. For an actual payment, though, what counts is the rate at the moment the QR code is generated.

Where you can pay taxes in crypto in Switzerland

Two schemes are confirmed. The key differences at a glance:

In both cases the payment counts as received with a value dateThe date on which a payment is credited to the recipient. T+1 means one day after your crypto transfer. of T+1. If you pay on the last day of a deadline, factor that in.

Canton of Zug: how the payment works

Since February 2021, individuals and companies in the Canton of Zug can settle their taxes in bitcoin or ether. The limit started at CHF 100,000 per payment; in spring 2023 the canton raised it to CHF 1.5 million per bill. According to the tax administration, the limit reflects the risk framework of Bitcoin Suisse, which runs the payment solution.

Individuals can use it for cantonal and municipal income and wealth tax, direct federal tax, inheritance and gift tax and withholding tax. Companies can do the same for profit and capital tax. If you are an employee taxed at source, your employer normally deducts withholding tax from your salary – the crypto option only matters if you receive a bill for it. Taxes billed by the municipalities themselves, such as real estate gains tax or dog tax, are excluded.

You do not need an account with Bitcoin Suisse. You need a smartphone or tablet with a camera, a walletAn app or device in which you manage your own crypto and from which you send payments. holding enough BTC or ETH, and a stable internet connection. Bitcoin Suisse carries the exchange-rate risk; the canton receives only francs, value date T+1, in its account at Zuger Kantonalbank.

1. 1

   Wait for your tax bill

   It arrives by post as usual. Decide whether to pay it entirely in crypto – splitting it is not possible.

2. 2

   Request a crypto payment

   Use the tax administration’s secure contact form with the subject “Kryptowährungen”, giving your name, personal tax number, the tax claim concerned and the amount in francs.

3. 3

   Open the link and choose a coin

   You receive a link by email. The canton recommends not opening it on the device that holds your wallet. Choose BTC or ETH and a QR code appears with the amount at the current rate.

4. 4

   Scan and check

   Scan the code with your wallet and compare the recipient address in the app with the one displayed.

5. 5

   Request a receipt and confirm

   Enter an email address for the receipt and confirm the payment. Any shortfall can be paid by scanning the code again.

If you overpay, the difference is credited against future tax periods; there is no refund in crypto or francs. Keep an eye on the network feeThe fee paid to miners or validators for processing a transaction. It comes on top of the amount you send.: it is yours to pay and must not reduce the amount reaching the tax office.

City of Lugano: invoices by QR code in bitcoin or USDT

Lugano takes a different approach. Since December 2023 every invoice issued by the city can be paid in crypto – taxes for individuals and companies, fees and fines, including older unpaid invoices. Accepted are bitcoin, bitcoin over the Lightning NetworkA payment network built on Bitcoin for fast, low-cost small payments that are not recorded one by one on the blockchain. and USDT on Ethereum. There is no upper limit; for payments above CHF 1,500,000 a dedicated process with exchange-rate hedging is available.

The process is lean: open the payment form on the city’s official website, scan the code on the QR-billThe standard Swiss payment slip since 2022, with a Swiss QR Code containing the IBAN, amount and reference. or enter the IBAN, amount and reference number by hand, choose the cryptocurrency and pay. The city explicitly warns against using payment pages found through search engines – sensible advice, as fake payment pages are a known scam.

Bitcoin Suisse charges 1% of the franc amount, built into the exchange rate. Each payment settles one invoice in full. Bitcoin Suisse emails a receipt on request. Refunds are made only in francs, to an account in the name of the invoice holder. The city holds no crypto itself; amounts are converted into francs immediately.

One caveat for Ticino taxpayers: the scheme covers invoices issued by the City of Lugano. We found no crypto option for tax bills from the Canton of Ticino. In everyday life, hundreds of Lugano shops also accept bitcoin and USDT under Plan ₿ – see our page on bitcoin in Lugano. Where to get USDT is explained in buying USDT in Switzerland.

Zermatt, Chiasso and a short history of crypto taxes

Zug and Lugano were not alone. Two early schemes are poorly documented today:

1. 2016

   The City of Zug’s residents’ registration office accepts bitcoin for fees of up to CHF 200 – today ether as well.

2. 2018

   Chiasso accepts part of its municipal taxes in bitcoin, first up to CHF 250, later reportedly up to CHF 1,000. Current status unconfirmed.

3. January 2020

   Zermatt introduces bitcoin for municipal taxes and counter services, with a terminal in the town hall and Bitcoin Suisse handling payments. Current status unconfirmed.

4. February 2021

   The Canton of Zug accepts taxes in BTC and ETH, initially up to CHF 100,000 per payment.

5. March 2022

   Lugano launches Plan ₿ together with Tether.

6. Spring 2023

   Zug raises the limit to CHF 1.5 million per tax bill.

7. December 2023

   Lugano opens all city invoices, taxes included, to payment in BTC and USDT.

8. 2024

   Zug records about 120 crypto tax payments totalling CHF 3.3 million.

Zermatt, the car-free resort below the Matterhorn, introduced bitcoin for municipal taxes and counter services in January 2020. Reports at the time mentioned no limit for taxes and CHF 150 for administrative fees. We found no more recent official confirmation. Chiasso became the second municipality after Zug to accept bitcoin in 2018; according to tio.ch it received a single payment in five years. In both cases, ask the municipality before you pay whether the option still exists.

Where it is not possible

Our research found no canton other than Zug offering an official way to pay taxes in crypto; for Bern, for example, we found no trace of one. So if you live in Zurich, Geneva, Basel or Vaud, you will need to sell first. Direct federal tax can only be paid in crypto via Zug, because the cantons collect it. For levies the federal government collects itself – VAT or customs duties, for instance – there is no crypto route.

The workaround works everywhere: sell bitcoin on a Swiss platform, have the francs paid into your bank account and pay the QR-bill as normal. Costs are similar. Relai charges 1.0% plus a small spread on sales, while on Kraken Pro a trade in the lowest volume tier costs 0.40% as maker or 0.80% as taker. Our guide to cashing out crypto in Switzerland shows how to convert to francs cleanly.

Tax consequences: paying is selling

Paying taxes in bitcoin means disposing of your coins. For private investors this usually has no consequences: capital gains on private assets are tax-free in Switzerland (Art. 16 para. 3 DBG), and losses are not deductible. Whether you bought your bitcoin at CHF 5,000 or CHF 50,000 makes no difference to your income tax.

It is different if the tax authority classes you as a professional trader. The Federal Tax Administration looks at criteria such as holding period, trading volume and the use of borrowed money. In that case the gain is taxable income, and social security contributions may also apply. More in our crypto tax guide for Switzerland.

For wealth tax, what counts is what you hold on 31 December. Keep the Bitcoin Suisse receipt and the transaction ID: they show when, and at what value, the coins left your assets. Our guide to declaring crypto on your tax return explains how to report your holdings.

Is it worth it? Pros and cons

In short, paying in crypto makes most sense for taxpayers in Zug and Lugano who already hold bitcoin or ether and want to sell some anyway. Buying crypto specifically to pay your taxes means paying fees twice. If you do not own any coins yet, our guide to buying bitcoin in Switzerland compares providers; for ether, see buying Ethereum.