So what earnings can be derived from an independent gainful activity? According to the FTA Circular No. 36 on Professional Trading in Securities of July 27, 2012, the existence of a professional trading in securities is excluded a priori. It is according to certain criteria that it may or may not be considered a professional activity.
The first question is whether this circular applies to cryptocurrencies. Indeed, they are not mentioned in the circular. However, by analogy, it is believed that the principles of this circular are applicable to digital assets.
Under this circular, there is a prerequisite test to state with certainty that it is a simple management of private wealth and therefore capital gains are not taxable. These criteria are as follows:
- Holding for at least 6 months,
- Trading volume that does not reach five times the total value of your different portfolios (e.g. CHF 100,000 if your portfolio was worth CHF 20,000),
- Gains representing less than 50% of the taxpayer’s other income,
- No financing from foreign funds,
- Very minimal use of derivatives.
It should be noted that the clumsy wording of the circular suggests that if one of the criteria is not met, the taxpayer will be considered a professional. However, this is not the case! The preliminary examination simply excludes the automatic application of the private wealth management regime.
Indeed, if one of the criteria is not met, it is quite possible that the gains in cryptocurrencies are still considered as private management.
If one of these five criteria is not met, the situation must be analyzed on a case-by-case basis.