Blockchains, Smart Contracts, Decentralised Autonomous Organisations and the Law
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Blockchains, Smart Contracts, Decentralised Autonomous Organisations and the Law

Edited by Daniel Kraus, Thierry Obrist and Olivier Hari

The growth of Blockchain technology presents a number of legal questions for lawyers, regulators and industry participants alike. Primarily, regulators must allow Blockchain technology to develop whilst also ensuring it is not being abused. This book addresses the challenges posed by various applications of Blockchain technology, such as cryptocurrencies, smart contracts and initial coin offerings, across different fields of law. Contributors explore whether the problems posed by Blockchain and its applications can be addressed within the present legal system or whether significant rethinking is required.
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Chapter 11: Tax treatment of cryptocurrency holders and miners in the era of virtual currencies from a multijurisdictional and Swiss perspective

Thierry Obrist and Roland A. Pfister


The number of Bitcoins in circulation has grown from over 5 million in 2011 to approximately 16.95 million in March 2018. Unfortunately, this accelerated growth pace has not been followed by the correspondent regulation of cryptocurrency from a tax perspective. While the tax consequences of certain aspects may be anticipated (e.g., payments to an employee made in cryptocurrencies will likely be assimilated to salary), the answer to other issues such as whether token holders are subject to Automatic Exchange of Information, or how to qualify economic advantages received by token holders, or even whether a mining plant represents a permanent establishment for tax purposes, is unclear. The aim of the present contribution is to provide an overview on how different jurisdictions – with a particular emphasis on Switzerland – have addressed the tax treatment of cryptocurrencies. This multi-jurisdictional study of the current situation includes the analysis of the tax treatment applicable to the mining, holding and transfer of tokens under both domestic law and tax treaties. Finally, along with their personal opinion, the authors propose alternative solutions to specifics issues that are as of today not regulated.

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