Articles announces a Corporate Sponsorship Agreement with Crypto Valley Association (CVA)

By | Articles, CVA in the News

Nyon, Switzerland, 22.11.2019 is proud to announce the Corporate Sponsorship Agreement with the Crypto Valley Association, one of the world’s leading blockchain and cryptographic technology ecosystems. The agreement establishes as the CVA’s official online voting supplier from 2020. The CVA will use the mobile application for different purposes, including statutory voting such as during the Annual General Meeting and within any relevant decision making process requiring member participation. provides mobile online voting that is easy and intuitive, with higher security than current mobile banking apps.

About Crypto Valley Association
The Crypto Valley Association (CVA) is an independent, government-supported organization located in the Swiss Canton of Zug. Its focus is on developing and executing community-driven programs targeted at establishing and growing the ecosystem for blockchain and cryptographic technologies globally. Currently, the community consists of approximately 1,500 active and 7,000 passive members, 30% of which are international.

About is a blockchain based voting app offering full supervision to voters directly from their smartphone and the first solution enabling voting rights to any standard token holder. Furthermore, matches the highest requirements in voting platforms in terms of security, data confidentiality and the integrity of the results. Professionals and private organizations are’s primary customer targets.

Ray Chow-Toun, Founder of said: The shoemaker’s children in the blockchain ecosystem do not go barefoot. Henceforth blockchain based voting is a natural evolution in the decision making process at the Crypto Valley Association and we are proud to supply leading edge solution to our peers.

Alexander Schell, Executive Director of the Crypto Valley Association added: is an important new strategic partner for the CVA. In order to make our internal voting infrastructure and mechanisms more transparent, we are partnering with to leverage blockchain technology into the governance of the association. We want to demonstrate, in collaboration with our members and partners, the broad application of distributed-ledger technology. is a perfect example of this symbiosis.

For more information, contact at

Economic Framework of Digital Currencies

By | Articles, CVA in the News

Regulatory Working Group (RWG)
Task Force: “Central Banks, Digital Currencies and Monetary Policy – CBDC & MP”
Athanasios Ladopoulos, Task Force Leader.

“This paper is part of a series of papers on central banks, digital currencies and monetary policy. We kick off our journey by examining the economic framework of crypto currencies and briefly addressing relevant issues, opportunities and threats, as well as shedding light on how Central Banks, Retail Banks, Governments and their constituents could be affected. While cryptocurrencies are becoming the evolutionary step of paper money, digital currencies have been in use for some time now, for example in interbank lending and electronic accounts for major financial institutions. However, when it comes to retail banking and more specific the public, digital currencies are destined to change the way we interact with money…”

Read more: Download the full document.

Audit guidance on cryptocurrencies

By | Articles, CVA in the News

In September 2019, the Commission for Auditing of EXPERTsuisse ‒ the professional association of Swiss certified experts on auditing, taxes and fiduciary ‒ published a Q&A guidance on the audit of cryptocurrencies.


It was developed by auditors of six major audit firms with specific knowledge and experience in cryptocurrencies and distributed ledger technology. The guidance is based on an exemplary case and focuses on Bitcoin due to numerous possible conditions and circumstances depending on the token, its origin and how the companies handle their holdings. It covers the consideration of the internal control system and procedures to obtain audit evidence about the relevant assertions in the financial statements.

The Q&A stresses the importance of an effective internal control system pertaining the handling of the private keys. The whole life cycle is comprised in order ensure the entity’s exclusive control over the private keys in case of the entity managing its own wallets. The controls should inhibit unauthorized access to the private keys as well as to recovery seeds. Adequate measures can include e.g. an entitlement management with multisignature solutions for the authorization of transactions and the consideration of necessary redundancies. Companies with cryptocurrency holdings ought to regard not only operative controls but also accounting-related controls during the year and in the process of financial statement preparation, like the process of tracking transactions accurately and completely together with a proper valuation. In the Q&A several aspects and control designs are presented for controls related to cryptocurrency holdings. Audit clients should be aware that an inadequate internal control system in this context might result in higher audit fees due to additional audit procedures and increased risk or even a disclaimer of opinion.

Within the audit an entity will have to demonstrate existence of its cryptocurrency holdings. This relates particularly to the control over private keys. Two ways of providing evidence are micro transactions and sign message. The suitability and execution of these procedures depend on the circumstances and timing of the audit. The Q&A elaborates on the necessary steps and considerations of the procedures.

For the auditor it is important to take the degree of reliance of different sources into account when verifying transactions or determining balances of public key addresses on the blockchain. The information can be accessed directly or via providers. Even though the Bitcoin blockchain is public, query errors or incorrect displays might lead the inconclusive or insufficient evidence.

The sort and extent of audit procedures depend on numerous aspects and will vary from client to client. Relevant factors are the type of token being held, their origin, underlying DLT characteristics, whether the company manages the private keys on its own or uses external storage services, the effectiveness of the internal control system and processes as well as the timing of the audit, just to mention a few. The auditor has to choose his or her audit approach for each client respectively, but the recently issued Q&A provides orientation on an exemplary base case which can be adapted accordingly and helps to foster crypto activities in Switzerland.

The Q&A is available for members of EXPERTsuisse at in German, French and English.


Author: Heiko Petry (Board Member Working Group Tax / Accounting / Structuring and Audit Senior Audit KPMG AG)

CVA comments on the recently published SFTA working paper on cryptocurrencies and ICOs

By | Articles, Policy / Regulations


By the Tax/Accounting/Structuring Working Group

On 27 August 2019, the Swiss Federal Tax Administration (SFTA) has published a working paper on cryptocurrencies and ICOs/ITOs in relation to respective wealth, income and profit tax, withholding tax and stamp duty considerations. The working paper can be downloaded here (German).


This publication follows up with previous publications by the SFTA on the Swiss VAT guidance for supplies involving cryptocurrencies & ICOs in June 2019 as well as the accounting guidelines published by EXPERTsuisse for utility tokens and asset tokens. 

The position shared within this working paper is based on the practice maintained by the SFTA to date and therefore represents a snapshot of the transactions submitted to the SFTA by end of May 2019. Further, the token categorization is aligned to the guidance published by FINMA on 16 February 2018. Having said that, it must be assumed that there are still open questions in respect of particular transaction circumstances which require conclusive answers and constitute “work in progress”. 

The CVA Working Group Tax / Accounting / Structuring (CVA WG TAS) appreciates the systematic efforts of the SFTA shared within this working paper as it helps to further provide transparency on the current tax practices. However, the working paper contains several gaps, assumes very specific, non-generic facts and circumstances and in turn, leaves a lot of blank spots. This asks for further clarifications.  

In order to provide the community with our perspective on this working paper, we as the CVA WG TAS gladly share below respective comments prepared by Thomas Linder / MME.  



The SFTA distinguishes between Native / Payment Tokens without legal claim, Asset-backed Tokens with a contractual claim to repayment or cash payment and Utility Tokens with a contractual claim to use a digital service. In the case of Asset-backed Tokens, a distinction is also made between Debt, Equity and Participation Tokens, although all (digital) participation rights under company law are expressly excluded from these definitions.

It is thus based on FINMA’s token triad of Payment, Asset and Utility Tokens. However, its ICO Guidelines from February 2018 are a purely purpose-oriented, regulatory classification in which the Anti-Money Laundering Act (payment/means of payment), the securities regulations (asset/investments, above all also participation rights under company law) and a category without financial regulations (utility/usage) are represented. Therefore, the use of similar terms is more confusing than clarifying. The same can also be said of the practical notices issued by the VAT authorities in this area, which also use different definitions. A more comprehensive, cross-agency system would have been more effective and easier to understand.



It is also astonishing that the SFTA also takes a stand on the cantonal wealth tax and influences the (cantonal) valuation of digital assets with its price lists. In our opinion, the specification of tax values without an objectively ascertainable market value (e.g. on a regulated stock exchange) is definitely not within the competence of the SFTA and is questionable both formally and in terms of content. The proposed valuation of highly volatile assets on the reporting date would then hardly correspond to the long-term realizable, taxable market value. It is significant, however, that the cantons largely comply with these conditions without any discernible resistance.



Certain issues, such as the valuation of wage payments in the form of tokens or the distinction between private asset management and self-employment, are forced into certain ( wanted ) forms without a thorough examination of the facts. For example, an “analogous application of the criteria according to Circular No. 36 on commercial securities trading” to native tokens makes no sense at all, since these are to be treated as transactions with conventional means of payment (currencies) and are therefore not securities. In practice, however, the differences between securities and currency trading are so immanent that “analogous application” is diametrically opposed to the content and purpose of KS 36.



In principle, the token types described by the SFTA are not subject to withholding tax due to the lack of a legal basis. This is to be welcomed.

However, the FTA reserves the right to levy withholding tax “if the two following cumulative thresholds are not met:

  • The shareholders of the issuer may hold a maximum of 50% of the issued token at the time of the respective due date. 
  • The defined profit participation quota must result in payments to the token holders not exceeding 50% of the EBIT.”

Unfortunately, this provision is worded in a cumbersome manner and leaves open whether the “safe haven” is violated if both or only if one of the thresholds is not met.

At this point, we would also like to refer to the general rules concerning hidden profit distributions. These are payments to shareholders or to related third parties who have their legal basis exclusively in the ownership relationship and are not openly disclosed as such in the accounts. An obvious, recognizable disproportion between performance and consideration is assumed. A contractual payment to shareholders, which is also made to unrelated third parties under the same conditions, can, therefore in our opinion, hardly qualify as a hidden distribution of profits. The thresholds mentioned can be used as indications. However, the fulfilment of the other requirements is absolutely necessary for the existence of a hidden distribution of profits.



It is correct that the token categories mentioned are not subject to securities transfer tax, even in the case of transactions via securities dealers, provided that they do not refer to taxable securities within the meaning of the Stamp Duties Act.


The CVA WG TAS will keep you up-to-date in respect of any upcoming developments in this respect. Stay tuned!


CVA Announces New Governance of Southern Alps Chapter

By | Articles, Public Announcements

The Crypto Valley Association has announced a change in governance of its Southern Alps Chapter, with the current chair, Gianni Minetti, passing the torch to Lars Schlichting and Gianfranco Prini, respectively taking over as co-chairs for Ticino and for Italy. With this, the Southern Alps Chapter intends not only to further accelerate the aggregation and dissemination of know-how in Ticino, but also expand its activities to Italy as a natural extension for exchanges and the cross creation of value.

Lars Schlichting brings to the Chapter his advisory experience to corporate clients in the application of new technologies like blockchain, as well as in the compliance with regulatory laws. An attorney-at-law, Lars was part of the legal department of the Swiss Federal Banking Commission (now FINMA) and Partner at KPMG. Since 2018 he has worked with Kellerhals Carrard law firm and the Poseidon Group Holding.

Gianfranco Prini will support the Chapter thanks to his uniquely vast and eclectic knowledge and passion for computer science. Founder and executive of multiple technology companies, Gianfranco has a 45 year long academic career in Pisa and Milano as a professor of theoretical computer science, logics and AI; programming languages, operating systems and software engineering; computer networking, web technologies and digital communication; history of computer science and computing.

President Daniel Haudenschild commented “I am very happy that the CVA Southern Alps could gain such unique expertise from Lars Schlichting and Gianfranco Prini, two outstanding players in the ecosystem, while retaining the solid performance always granted by Gianni Minetti and Julia Borghese in every event they organized. With this governance we are best set up to serve the needs of the buoyant crypto and blockchain industry in the southern alps.”

Gianni Minetti and Julia Borghese, current chair and co-chair, will remain part of the CVA and keep actively contributing to its activities and success.

The Chapter will keep supporting contributions to discuss and grow blockchain and cryptographic technologies in academic and business communities, promote events for private and public organizations willing to explore this technology, and engage industry associations, financial institutions, research institutes and local government representatives.


Media Contact for the Southern Alps Chapter:

Julia Borghese,

New CVA Officers Appointed

By | Articles, Public Announcements

The Crypto Valley Association is pleased to announce a range of new officers who will be supporting the Association’s activities as it grows and develops.


Alexander Schell

Executive Director

Contact :


Dennis Flad

Chair – Enterprise Working Group

Contact :


Mauro Cappiello

Co-Chair – Enterprise Working Group

Contact :


Bora Altuncevahir

Chair – Education Working Group

Contact :


Pascal Brun

Co-Chair – Education Working Group

Contact :


Bernadette Ochsner

Chair – Events Working Group

Contact :


Maximilian  Souchay

Co-Chair – Events Working Group

Contact :


Biba Homsy

Chair – International Affairs Working Group

Contact :


Engin Caglar

Co-Chair – International Affairs Working Group

Contact :


Martin Eisenring

Chair – Investor Working Group

Contact :


Daniela Rosa

Co-Chair – Investor Working Group

Contact : 


Morgan Pierce

Chair – Marketing Working Group

Contact :


Fai Protasovs

Project Management Trainee

Contact :


Jean-Philippe Aumasson

Co-Chair – Cyber Security Working Group

Contact :

CVA Announces Change in Board

By | Articles

The CVA announces that Mrs. Kamales Lardi tendered her resignation from the board, effective 1 July 2019. The board thanks Mrs. Lardi for her contribution to CVA during her service.

Mrs. Lardi was elected as CVA board member on 31 January 2019.

CVA Initiative Regarding FATF Guidance for Virtual Assets

By | Articles, Policy / Regulations

The Financial Action Task Force (FATF) has recently updated its Guidance on the treatment of Virtual Assets (VA) and Virtual Asset Service Providers (VASP), which lays out due diligence measures that must be implemented to prevent money laundering and terrorism financing.

The Crypto Valley Association (CVA) recognizes that this new Guidance presents significant challenges to members who may issue or deal in VAs and who may be classified as VASPs (defined below).

With this in mind, the CVA will be conducting one or more information session(s) in the upcoming months in order to inform members and the DLT community of requirements and possible solutions regarding compliance with the new Guidance, which will soon be reflected in domestic regulations.The CVA will equally liaise with relevant authorities and counterparts in Switzerland and abroad to support the implementation of the Guidance.

What is a VASP?

Virtual Asset Service Provider (VASP) means any natural or legal person who conducts one or more of the following activities for or on behalf of another natural or legal person:

  • exchange between virtual assets and fiat currencies;
  • exchange between one or more forms of virtual assets;
  • transfer of virtual assets;
  • safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets (i.e. custody / custodial wallet solutions); and
  • participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset (i.e. initial token or crypto offering).

The new FATF guidance includes recommendations on several key points, including;

1. VASPs must join the fight against money laundering / terrorism finanicing

Exchanges, crypto banks, issuers of payment tokens and the like will need to be licensed and implement a program to manage AML/CTF (identify and verify the authenticity of clients, monitor transactions, etc.) for transactions above USD 1,000.

2. Travel rule

VA transfers that take place between a VASP and other financial intermediates (i.e. other VASP, banks) will require the originating party (ie. sender) to obtain, hold and transmit required information on both the sender & recipient, including names, residential and wallet addresses. Similar requirements are placed on receiving / beneficiary VASPs.

3. SRO

VASPs should be supervised or monitored by a competent authority, not a self-regulatory body. FINMA-licensed SROs should be considered competent authorities in Switzerland.

Note: During the process of refining its Guidance (first issued in 2015), the CVA’s Regulatory and Policy Working Group provided input to the FATF, with consideration to the needs and experience of Crypto Valley companies and the industry as a whole.

Read the CVA’s submission to the FATF.

The CVA encourages all of its members to join in the conversation and attend the information  sessions – and be prepared to follow developments in the space with careful attention.


Final ESTV / SFTA VAT guidance on supplies in connection with blockchain and DLT

By | Articles

By Thomas Linder, Tax Partner MME and Monika Molnar, Tax Partner MME, both members of the Crypto Valley Association Working Group Tax / Accounting / Structuring

After a long-lasting drafting procedure including two public review rounds, the VAT Department of the Swiss Federal Tax Administration (FTA VAT DEP) published on 17 June 2019 its long-awaited practice adjustments for VAT on supplies in connection with blockchain and distributed ledger technology. This blog is based on an initial publication prepared by MME and has been complemented with further input from other members of the CVA Working Group Tax / Accounting / Structuring (CVA WG TAS).

The adjustments to the Swiss VAT practice have been made under the following different publication titles:

publication title number title Published Status as of
04 VAT object Use of cryptocoins/tokens 17.06.2019 01.06.2019
04 VAT object Validating and Verifying Transactions via the Blockchain 17.06.2019 01.06.2019
04 VAT object Transmission, trading and storage of cryptocoins/tokens 17.06.2019 01.06.2019
04 VAT object Issuance of cryptocoins/tokens in the context of an initial coin offering 17.06.2019 01.06.2019
04 VAT object Basis 17.06.2019 01.06.2019
04 VAT object 2.7.3 Supplies related to blockchain and distributed ledger technology 17.06.2019 01.06.2019
07 Tax assessment and tax rates 1.1.4 Remuneration in cryptocoins/tokens 17.06.2019 01.06.2019
16 Accounting and invoicing 2.4.5 Invoices in foreign currency 17.06.2019 01.06.2019
06 Retail 1.10 Charges in cryptocoins/token 17.06.2019 01.06.2019
12 travel agencies and tourist associations 7.2 Calculation of the remuneration in special cases 17.06.2019 01.06.2019


General comments by MME & CVA WG TAS

The published practice adjustments to supplies in connection with blockchain and distributed ledger technology have undergone some important and correct changes compared to the revised first practice draft of 29 January 2019 on crypto currencies. However, from our point of view, unfortunately, they still do not fully reflect the economic, accounting and cybernetic, self-governing aspects of a decentralized, public open-source blockchain system. These would have to be considered for the legal effect of transactions on the blockchain. The VATability of a token transaction depends strongly on whether the token is synchronized with relative or absolute rights or not. If the transmission of a token in a cybernetic system does not trigger a synchronous transmission of an underlying legal relationship, the transaction should be irrelevant for VAT purposes.

Crowdfunding activities such as Initial Coin Offerings (ICOs), with which companies raise funds (in legal currency or crypto currency) for a specific entrepreneurial or open source project, are to be distinguished from these. An ICO usually consists of a bunch of contractual or factual obligations promised by the fundraiser. These can be related to the token function but can also exist independently of it. If, for example, the fundraiser also provides various supplies (e.g. production order/software development or transfer of ownership of an intellectual property right), the transaction may be relevant for value-added tax, irrespective of the token function.

Unfortunately, the published practice adjustments in these areas are incomplete. The following is a brief summary of the most important points.

Main types of tokens

According to FTA VAT DEP, the following three main types of cryptocoins/token can be distinguished:

  • Payment coins/token: Cryptocoins/token which are designed as pure payment coins/token serve no purpose other than the use as means of payment for the purchase of supplies and/or services from one or more service providers. Payment coins or tokens therefore do not entitle the holder to certain or determinable services, but merely represent the contractually agreed means of payment.
  • Utility coins/token: If cryptocoins/token entitle to certain or determinable services and/or grant you access rights to a platform, application or similar (licence or licence-like right), this is referred to as usage coins/token.
  • Asset coins/token: For example, if cryptocoins/token are entitled to participate in earnings, turnover, profit, a certain part of earnings or turnover, derivative rights or the like, they are so-called assetcoins/token. Investment coins/token are always based on a contractual legal relationship and therefore do not establish a corporate ownership relationship and do not entitle the holder to repayment of the amount originally paid in.

MME & CVA WG TAS comments:

The categories discussed are very narrowly defined, disregard the dual function of DLT-based tokens (i.e. always existing technical function that may be synchronized with a legal function) and show large gaps. In our view, comments on “native tokens” or tokens with voucher, equity, debt or investment fund character are missing. In addition, mixed forms are insufficiently covered.

  • According to FTA VAT DEP, payment coins/token can only be used as a means of exchange, i.e. as digital currencies. However, this individual functionality could only be ensured in a self-contained payment system, in which an alternative use (centrally controlled) can be excluded. However, it is not considered that especially with open, decentralized protocols and applications, the corresponding “native tokens” (e.g. BTC, ETH, XTZ, ADA) are only digital information and settlement units without synchronized legal content. An agreement on the use shall only be concluded between the parties outside the blockchain.

    For example, a BTC would not qualify as a pure “payment token” as defined, since a BTC per se is not necessarily a means of payment or exchange and can in fact also be used for other purposes. The Bitcoin blockchain does not define a purpose, but only posts transactions according to the algorithmically recorded transaction and consensus rules. The basic function of a BTC is therefore a technical, Bitcoin protocol-specific usage functionality. Use as a means of payment is neither guaranteed by the system nor by a counterparty and there is no contractual relationship with an operator. Although a BTC can de facto be used as a means of payment between two parties, such an agreement is only ever concluded outside the block chain “peer-to-peer”. BTC, on the other hand, can in fact also be used as an information carrier without assuming a payment function (e.g. “colored coins”).

    The FTA VAT DEP has unfortunately ignored the dual function of DLT-based tokens (i.e. always existing technical function that may be synchronized with a legal function). A definition for “native tokens”, whose function is limited to programmed technical functionalities in a cybernetically functioning blockchain system, would also have to be supplemented and assessed separately.

  • Utilization coins/token entitle according to FTA VAT DEP to the purchase of certain or determinable services and/or grant an access right to a platform, an application or similar (license or license-like right). To meet these requirements, the token must be synchronized with the underlying relative or absolute right.

    However, a general qualification of all technical functionalities as a utility goes too far. For example, the usage and settlement functions of “native tokens” in decentralized protocols or applications are usually only factual usage options, but not corresponding enforceable rights. A concrete supply is missing. Only the transfer of defined, determinable usage rights would be taxable. Furthermore, a (taxable) prepayment character is only given if both the supply itself and the location of the supply could be determined. However, this is not the case for “native tokens” (no supply) or tokens with voucher function (supply only when redeemed). The qualifications of native tokens and vouchers must therefore be assessed separately.

  • According to FTA VAT DEP, investment coins/token (so-called asset coins/token) entitle the holder, for example, to a share in earnings, turnover, profit, a certain portion of earnings or turnover, derivative rights or similar rights and are always based on a contractual legal relationship.
    However, the most important categories of asset tokens, which reflect shareholdings under company law (equity) or entitle to repayment of the amount originally paid in (debt capital / investment funds), are excluded from this definition. This does not go far enough for a comprehensive presentation. A capture of all asset token types would be desirable.

Initial Coin Offerings / Token Generating Events

In an Initial Coin Offering (ICO), Token Generating Event (TGE), Initial Token Offering (ITO) or Security Token Offering (STO), a company raises funds (in legal or crypto currency) for a specific business or open source project. The donors are usually assigned blockchain-based coins/token, which are generated on a newly developed blockchain or by means of a digital, self-executing computer program (so-called Smart Contract) on an existing blockchain and stored decentrally. This can happen step by step or only at the start of a new blockchain (so-called Genesis block) or application.

The FTA VAT DEP qualifies ICOs in the practice adaptations as follows:

  • The transfer of financial resources within the framework of an ICO represents a remuneration for a service ( 18 para. 1 in conjunction with art. 3 lit. f of the VAT Act) on the basis of the contractual obligations of the company, unless it is a matter of a payment coin/token.
  • The issuance of payment coins/token against means of payment represents an exchange of cash that is not relevant for VAT purposes.
  • The issuance of investment coins/token against means of payment is exempt from VAT without credit based on 21 para. 2 ch. 19 lit. e of the VAT Act. The corresponding revenues do not constitute non-remuneration for the company (art. 18 para. 2 of the VAT Act ).
  • The issuance of usage coins/token against means of payment constitutes a supply of services or goods and is taxable, provided that no exemption under 21 para. 2 of the VAT Act applies.
  • If a company only (?) undertakes to develop a platform or software with the funds collected, for example, a taxable supply can be assumed. The supply is provided by the company and the location is determined in accordance with 8 para. 1 of the VAT Act. It does not matter whether the company has the prospect of a later allocation of cryptocoins/token at the time of borrowing.
  • In order to prove the place of performance, the taxable person uses, for example, identification as part of a know-your-customer process or, in the case of electronic services, the information suitable as evidence in this respect.

MME & CVA WG TAS comments:

The concrete design of an ICO (hereinafter also referred to as TGEs and lTOs) and the coins/token created in this way differ substantially in technical, functional and legal respects. However, the focus is usually on raising capital for the project. In return, the fundraiser enters into a bunch of contractual or factual obligations, which are related to the token function, but can often exist independently of it. The VAT assessment of an ICO, therefore, depends to a large extent on its individual structure. The respective tax consequences must be examined on a case-by-case basis and are difficult to describe in general terms.

In general, we believe that the same VAT rules should apply as for crowdfunding in general. Therefore, the close link between the VAT consequences and the token qualification falls short.

A link to the bookkeeping of ICOs according to the Q&A of the Commission for Financial Reporting of EXPERTsuisse (German / French),which has published the following positions (as of April 30, 2019) in collaboration with the CVA WG TAS, would have been particularly recommended here:

  • Development and access to open source blockchain protocol in AG / GmbH; utility token (“native token”); logic of long-term production orders; prepayments
  • Development and access to open source blockchain protocol in foundation; utility token (“native token”); logic of use of foundation capital / donation; foundation capital or prepayment
  • Development and access to open-source blockchain protocol in foundation with dual financial statements according to OR/FER 21; utility token (“native token”); logic of use of earmarked fund; earmarked fund (debt)
  • Development and temporary access to blockchain protocol; utility token (“voucher”); analogy to investment subsidy; deferred revenue; advance payments
  • Investments in real estate; Asset Token; Analogy to investment funds / capital contribution; PS capital
  • Development and marketing of robots and payment of revenue participation; asset token; analogy to investment subsidy; ongoing accrual for revenue participation; prepayments

The decentralized character of DLT-based systems must also be taken into account when verifying the place of supply.

Mining / Staking

FTA VAT DEP distinguishes between block reward and transaction fee and links different tax consequences to these qualifications. This can also influence the right to deduct input tax.

MME & CVA WG TAS comments:

The decentralized character of blockchain protocols is also insufficiently considered when it comes to mining / staking. An analysis of the corresponding tax consequences must be carried out on a case-by-case basis.


Settlement must be carried out in the local currency. The supplier must convert the remuneration for supply rendered on the reporting date into a legal (domestic or foreign) currency at the current rate for a fee in cryptocoins/token at the time the remuneration is received or invoiced (art. 40 of the VAT Act).

According to FTA VAT DEP, the invoice must show the fee for the supply separately and the VAT amount divided according to tax rates in a legal currency. Reporting the remuneration for individual supplies only in cryptocoins/token does not constitute separate invoicing under VAT law. The conversion can be carried out using suitable conversion portals, whereby the selected conversion source must be kept constant. For certain cryptocoins/token the FTA publishes daily courses (course lists of the FTA). It should be possible to check the documentation of the conversion easily and immediately at any time.

This procedure according to the VAT Act must also be applied to the declaration of supplies subject to acquisition tax (art. 45 para. 1 of the VAT Act). Further information on acquisition tax can be found in the VAT information on acquisition tax.

Losses suffered in the sale of cryptocoins/token against legal currency or in the use of cryptocoins/token to obtain services may not be deducted from the fee.

MME & CVA WG TAS comments:

A “prohibition” of invoicing in crypto currency only, diametrically contradicts the qualification of a “payment token” as a means of exchange and payment. If such a token is assigned a payment function, it must also be possible to issue a corresponding invoice. Anything else seems impractical. If a fiat equivalent is missing in an invoice statement, application of the published rates of the FTA (or the effective rate at the time of invoice creation/transaction time stamp, based on any other stable source of crypto currency exchange rates) for the preparation of VAT declarations should be sufficient to provide appropriate results for all parties involved.

In addition, Bitcoin, for example, is in several countries already equal to the legal national currency, so that a statement of the remuneration would only have to be permissible in Bitcoin accordingly. Equal treatment of cryptocurrencies and foreign currencies is therefore necessary.

Finally, example c) under “2.4.5 Invoices in foreign currency” illustrates the difficulties of implementation in a vivid way: 2 pizzas are sold as of 22 May 2019 for BTC 10,000 and a receipt for USD 30 is issued, which should be relevant for Swiss VAT. It is not comprehensible how the conversion was carried out. At a BTC rate of around USD 8,000 per invoice date, the equivalent of BTC 10,000 BTC would have been around USD 80 million! An invoice with USD 30 does not only seem wrong to us under these circumstances, but also latent criminal. The example is, therefore, useless in practice and should be changed or even removed.

What’s next

Given the still prevailing need for clarity in tax matters (in particular VAT) for many of the crypto businesses, the CVA WG TAS is currently planning for an upcoming meet-up (scheduled for late September 2019) to discuss the current different Swiss tax practices. Further details will be shared once they are available.

CVA Contribution to Consultation on Framework Conditions for Blockchain/DLT

By | Articles, Policy / Regulations

The Swiss State Secretariat for International Finance (SIF) recently closed a round of public consultations aimed at gathering input on the possible framework improvements to for DLT and blockchain.

As with previous such consultations, the Crypto Valley Association was active in gathering input and providing an opinion paper to the SIF, in particular with the support of the CVA’s Regulatory and Policy Working Group chaired by Thomas Stoltz and Tobias Kallenbach.

Read the CVA’s Position Paper here.