Stage ten: tax of the sale

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The issuer's tax on the sale depends on the entity and the classification. A Zug foundation that is tax-exempt pays nothing. A Zug foundation that is taxed recognises the sale proceeds as revenue when the tokens are delivered. It deducts the costs of development and distribution and pays profit tax at just under 12 per cent on the net result. For a utility token with a service obligation, the proceeds may be deferred over the period in which the service is provided.¹ Swiss VAT applies to the sale of a utility token as consideration for a service, with the place of supply determined by the recipient's location. Sales to Singapore participants are outside Swiss VAT while sales to Swiss participants attract it. Payment tokens are outside the VAT system as means of payment.² A Singapore issuer recognises the proceeds of a utility-token sale as income, deferred over the service period. No GST applies, because the supply of digital payment tokens is an exempt supply and utility tokens sold to overseas customers are zero-rated.³

For the participants, the receipt of tokens in exchange for payment is a purchase with no immediate tax, in both hubs. The later disposal is tax-free for a Swiss private holder and for a Singapore investor, and taxable for a trader in either country.

Notes

FTA working paper on cryptocurrencies and ICOs/ITOs, sections on the profit tax treatment of token issuances (revenue recognition on delivery; provisions for development obligations); DFTA, SR 642.11, Art. 58. Part G, Chapter IV. ↩
Value Added Tax Act of 12 June 2009 (VATA; MWSTG), SR 641.20, Art. 18 and Art. 21 para. 2 no. 19 (exemption of transactions in means of payment); FTA, MWST-Info 04 and practice on cryptocurrencies. Part G, Chapter V. ↩
IRAS e-Tax Guide, "Income Tax Treatment of Digital Tokens", section 9; Goods and Services Tax Act 1993 (2020 Rev. Ed.), Fourth Schedule, Part I, para. 1(1)(k) (exempt supply of digital payment tokens, with effect from 1 January 2020); IRAS e-Tax Guide, "GST: Digital Payment Tokens", 19 November 2019 as revised. Part M, Chapter III. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

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KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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