Blockchain and DLT: No Changes for Swiss Tax Lawby Company Announcement June 22, 2020
During its meeting on 19 June 2020, the Federal Council took note of the report on the need to amend tax law with regard to blockchain. The report concluded that no special legislative amendments to tax law are necessary.
As regards income, profit, wealth and capital gains taxes, the existing legislation has proved its worth. Existing VAT law also covers arrangements based on distributed ledger technology (DLT) and blockchain. Therefore, no legislative action is necessary as regards special tax provisions for the new instruments.
Another area examined was the collection of withholding tax on income from equity and participation tokens. Due to the adverse effects for Switzerland as a business location, among other things, the report recommends that withholding tax coverage should not be expanded. As regards transfer stamp tax, it advises against legislative amendments at present, due to uncertainty about the type and scope of the future use of DLT trading facilities.
The report on the need to adapt tax law to developments in distributed ledger technology (DLT/blockchain) was prepared by the Federal Department of Finance on the instructions of the Federal Council. On 7 December 2018, the Federal Council had decided to examine the current situation and assess any need for amendments to tax law.
Featured image credit: Unsplash