- Swiss Federal Administrative Court decision on taxation of blockchain services
- Taxpayer provided validation/verification activities in blockchain networks
- Two independent services for VAT purposes: taxable transaction processing service and non-taxable validation/verification activities
- Taxpayer received transaction fees for transaction processing and block rewards for remaining activities
- Initial tax authority guidance stated that activities compensated solely by block rewards are non-remuneration, while activities with transaction fees are taxable
- Court found that transaction processing qualified as taxable supply of services to transaction senders
- Remaining activities aimed at operation/functionality of blockchain and did not serve specific sender, so no identifiable service recipient and no VAT service relationship
- Block rewards received qualified as non-remuneration
- Court rejected tax authority’s position that validation/verification activities always qualify as a combination of supplies
- Transaction processing and remaining activities can be treated independently for VAT purposes.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
