Block chain and distributed ledger technology: No changes to tax law

The "Report on a possible need to adapt tax law to developments in the technology of distributed electronic registers (DLT/Blockchain)" was drawn up by the Federal Department of Finance (FDF) on behalf of the Federal Council. On 7 December 2018, the Federal Council decided to analyse the current situation and any need to adapt tax law.

In the area of income, profit, wealth and capital tax, the current legal system has proved its worth. The applicable VAT law also covers issues based on Distributed Ledger Technology (DLT) and Blockchain. Therefore, there is currently no need for legislative action to specifically cover the new instruments for tax purposes.

The levying of withholding tax on the income from equity and participation certificates was also examined. Among other things because of the negative impact on Switzerland as a business location, the report recommends that no extension of the withholding tax should be made. With regard to turnover tax, it recommends refraining from legislative amendments at present, as there is uncertainty about the nature and extent of the future use of DLT trading systems.

The press release of 19 June 2020 and all documents are available here.