Bitcoin & Taxes when using Dollar-Cost Averaging (DCA) - Bittr Academy

If you save in Bitcoin regularly with Bittr or another provider, you’re usually thinking about long-term wealth building and taxes are not your first priority. Still, it’s important to understand the basics of taxation early on, especially if you plan to sell your bitcoin on an exchange at some point.

Switzerland and other countries (particularly within the EU) handle this very differently.

Switzerland

In Switzerland, bitcoin and other cryptocurrencies are treated as regular assets for private individuals. They are handled similarly to foreign currencies or stocks.

No capital gains tax for private individuals

As long as you invest as a private individual (and are not classified as a professional trader), capital gains from bitcoin are tax-free. In practice, you could save via DCA for 10 years and later sell at a profit without paying income tax or capital gains tax on that appreciation.

Wealth tax and reporting

Your bitcoin holdings are, however, part of your taxable net worth and must be declared in your tax return as assets. Depending on the canton, wealth tax is due on this amount. The Swiss tax authorities publish a reference price for bitcoin each year, which is used as of the end of the year (31 December) for wealth tax valuation.

For a simple DCA saver in Switzerland, this means:

You have to declare your bitcoin holdings every year.
The number of satoshis you hold is more important for tax purposes than the exact purchase dates.
Capital gains on later sales are usually tax-free for you as a private person – as long as you are not classified as a professional trader.
UTXO tracking can be useful for transparency and personal organisation, but it is less critical for your tax liability itself.

EU countries

In most EU countries, crypto gains are taxable. However, the exact rules differ from country to country.

Countries with a tax-free holding period

Some countries use a model that rewards long-term holding: if you keep your coins for longer than a certain period, your gains may be tax-free.

Germany

Bitcoin is treated as an “other asset” and taxed under private sale rules. Gains are only taxable if the time between purchase and sale is less than one year. After a 12-month holding period, the gain is tax-free.

Portugal

Here too, capital gains from bitcoin are tax-free if you have held the coins for at least one year.

Luxembourg

In Luxembourg, crypto gains realised after more than six months are generally considered “non-speculative” and are therefore tax-free for private individuals. If the holding period is less than six months, the gains are treated as speculative and taxed at the normal income tax rate.

If you live in one of these countries, it’s worth keeping a close eye on your UTXOs and, when selling, making sure you use coins that are already older than the relevant holding period.

Countries that tax every sale

Other countries do not offer holding-period advantages. Gains from bitcoin sales are generally taxable there, for example:

France: Usually a flat 30% on crypto gains.
Spain: Capital gains tax on crypto with progressive rates (around 19–28%), plus possible wealth tax above certain thresholds.
Italy: Crypto gains are treated as “other income” and taxed at around 26%. For DCA savers in these countries, the holding period is less important. What really matters is how large your realised gains are and how carefully you document your buys and sells.

UTXO management for tax purposes

If you save via DCA and buy regularly (for example weekly or monthly) and use self-custody, you will normally get one new UTXO (Unspent Transaction Output) per on-chain purchase. A UTXO is like a single “coin” in the Bitcoin system. If you buy €50 worth of bitcoin every week and send it to your own wallet, you will accumulate many of these “coins” over time. Each of them can be linked to a purchase date, a fiat purchase price and an amount of bitcoin.

In Switzerland, you do not have to provide these details – only your total balance at year-end is relevant. UTXO tracking mainly helps you keep your own overview and potentially optimise fees for future transactions.

In countries with holding-period rules (such as Germany), you ideally need, when selling, your purchase price in EUR, the purchase date, the sale price and date, and the realised gain. Legally, tax authorities often look at your overall position, but in practice many tools calculate gains and holding periods on a UTXO basis or via FIFO (first in, first out).

A clean history makes it much easier later to see which coins fall into which tax category. Especially with DCA over many years, a simple tracking approach from day one can really pay off.

You don’t need to be a nerd to organise your UTXOs sensibly. It’s enough to understand the basic idea: every on-chain deposit to your wallet creates one or more UTXOs – essentially individual “coins” in your wallet. When you later make a payment, your wallet spends some of these UTXOs and combines them if needed. At the same time, it creates new UTXOs as change. With DCA, this creates many small building blocks over the years, each with its own purchase date and cost basis.

For everyday use, it’s often enough to have one wallet used purely for saving. There you can label incoming transactions or at least view the full history. Modern wallets offer what’s called coin control: you can see each individual UTXO with date, amount, and transaction. You can give them meaningful labels and, when sending bitcoin, choose exactly which UTXOs you want to spend. This is particularly helpful if you live in a country like Germany and want to sell primarily those coins whose holding period has already expired.

Selling via an exchange

If you eventually want to convert part of your bitcoin back to fiat, this typically happens via an exchange or broker. Alternatively, you can sell bitcoin on peer-to-peer platforms or at meetups, though that’s usually more suitable for smaller amounts.

On an exchange, what matters for tax purposes is not only how much you sell, but which coins you are selling. If your wallet is organised with coin control, you can deliberately choose UTXOs whose holding period has already been met. The exchange can see the history of the UTXOs you deposit, but it has no insight into your full internal wallet history. For tax purposes, what counts is your original purchase date, not the date you moved coins onto the exchange.

When selling, it’s worth keeping all documents in order: deposit and withdrawal confirmations from the exchange, and the records of your original purchases. That way, you – or a tax adviser if needed – can later clearly determine which gains are tax-free and which are taxable.

Final thoughts

In Switzerland, bitcoin gains are usually tax-free for private savers, but your balance must be declared as part of your wealth – tax is charged on your net worth, not on the sale itself.
In only a few EU countries is there a tax-free holding period; in many others, gains are taxable on every sale.
If you use DCA, it’s smart to keep an eye on your deposits, UTXOs, and wallet structure from the start, so you’re prepared if you ever need to sell in a tax-efficient and well-documented way.