Declaring your income from selling underwear: tax in Switzerland
Here is a subject many prefer to avoid, wrongly. Approaching taxation seriously is part of a calm practice. Let us be clear from the outset: this text is informative and cautious, it does not constitute tax advice. The Swiss system is federal and cantonal, situations vary, and only the tax administration of your canton — or a fiduciary — can settle your specific case. We strongly encourage you to consult them.
The general principle in Switzerland
In Switzerland, income is in principle taxable, whatever its source. Income derived from a sales activity could, in all likelihood, form part of taxable income and have to appear in the tax return. We phrase this in the conditional deliberately: the assessment depends on the scale, the regularity and the nature of the activity.
In other words, anonymity towards buyers does not exempt you from your obligations towards the tax office. The two matters are distinct.
Occasional or regular activity?
The distinction is important, even if its boundary is not always clear. A one-off sale of personal items is not treated in the same way as a regular and lucrative activity, which may be considered self-employment with the obligations that accompany it.
The more your activity becomes sustained and income-generating, the more likely it is to call for a proper declaration. In case of doubt — and doubt is frequent — prudence dictates enquiring in advance.
What about VAT?
Switzerland has a VAT registration threshold linked to annual turnover. The vast majority of supplementary activities remain, in practice, well below that threshold. We do not quote a figure here so as not to mislead: thresholds may change, and only the Federal Tax Administration is authoritative. Check the figure in force if your activity grows in scale.
The case of cryptocurrency payments
WEARED favours settlement in Bitcoin. This changes nothing as to the tax principle: income received in cryptocurrency remains, in all likelihood, income to be taken into account, generally converted into Swiss francs at its value at the moment of receipt. Switzerland has established practices concerning digital assets, and the cantonal administrations publish guidelines on the subject.
Keep a record of your transactions: dates, amounts and the CHF equivalent. Simple but rigorous bookkeeping will make your life considerably easier when the time comes.
Our common-sense recommendations
- Keep a record of your sales, even a summary one.
- Set aside a portion of your income in anticipation of a possible tax bill.
- Enquire in advance with your cantonal tax administration or a fiduciary.
- Do not assume that an anonymous payment amounts to non-declarable income: these are two different planes.
Adopting this rigour means giving yourself lasting peace of mind. It is also, quite simply, the attitude of a shrewd professional.
Do I have to declare this income?
In all likelihood, income is taxable in Switzerland whatever its source. We invite you nonetheless to confirm your situation with the tax administration of your canton.
Does anonymity exempt me from tax?
No. Anonymity protects your privacy vis-à-vis buyers, but it in no way alters your tax obligations, which belong to a separate plane.
Am I affected by VAT?
Probably not for a supplementary activity, most of which remain below the registration threshold. Check the threshold in force with the Federal Tax Administration if your activity grows.
How do I handle Bitcoin payments?
Income in cryptocurrency remains income to be taken into account, generally converted into CHF at the moment of receipt. Keep a record of each transaction and consult a fiduciary.
Can WEARED advise me on tax?
No. This content is informative and cautious. Only the cantonal tax administration or a qualified fiduciary can rule on your case.
