Generating Income with Covered Calls: How Is It Taxed in Switzerland?

Taxes
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Here’s the TLDR - I started selling covered calls in 2025 on a long-held stock and now generating regular premium income by rolling options weekly. Looking for guidance on how to correctly declare covered call premiums for Swiss tax purposes.

In more detail:

I’ve owned a particular stock for many years, but only started selling covered call options on it last year (2025). As a result, this will be my first tax declaration that includes income generated from options, and I’d appreciate some guidance from the community.

The income in question comes from option premiums received through selling covered calls. My approach has been the following:

  • I sell covered calls on a stock I already own.

  • Instead of letting the options expire, I typically roll them by buying back the existing contract and selling a new one.

  • The new contracts are usually 30–40 days out with a strike around 10 delta.

  • I repeat this process weekly, which has allowed me to generate fairly regular premium income.

Since I’ve never used an options strategy before 2025, I’m unsure how this activity should be declared for Swiss tax purposes. Specifically:

  • How are premiums from covered calls typically treated in the tax declaration?

  • Does the frequent rolling of options change anything from a tax perspective?

  • Are there any pitfalls or best practices I should be aware of when reporting this kind of income?

Any insights, experiences, or references would be greatly appreciated.

Thanks in advance for your help!

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Capital gains (not taxable for private wealth):

  • Any option returns
  • Price changes of stocks
  • Dividends from capital reserves

Income:

  • Normal Dividends
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ANd it’s why I LOVE writing options! :slight_smile:

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According to Kreisschreiben 36, trading options for other than insurance of your portfolio may be a reason to tax you as professional trader.

And that would mean you pay tax on stock capital gains too… :angry:

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Many on this forum, me included, trade or have traded options for (extra) tax-free income. To my knowledge, no one here has ever been declared a professional trader.

The story might be different if you are FIRED and a large part of your income comes from option trading.

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So the premiums generated from selling call options is not taxed at all? On the other hand, dividends for equities that issue those, are treated as income and taxed as such?

Any advice on how to declare premiums earned from covered calls in the tax declaration?

fyi, I’m employed full-time, my wife has a part time job, and this year I’ve been able to generate a significant amount of passive income via selling covered calls… roughly 15% of our invested capital.

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Yes, but how many had an investigation into this? I had one last year, had to put up all the details of my trading. Lucky for me my strategies are based on Kreisschreiben 36, so no problem.

I know that some of you just don’t provide the options trade records. There is no need for it because it is not relevant for tax if you are taxed as private investor. But during an investigation they will ask and ask for papers and details.

I don’t think the tax lady will do anything if it is only a few thousands. But when you reach 7 figures you probably will be investigated as I was.

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Is this a significant fraction of your overall wealth gain? (salaried income, long term equity gains, etc)

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Pardon my ignorance, but how does it actually work to reflect the options income?

  • You write options
  • Get $/CHF/etc.
  • End of year that’s reflected in your wealth
  • The tax authorities look at your assets and e.g. ask “wait a minute, you’re not working yet your wealth increased by more than we’d expect from dividends/pension/stock price increases, please explain?”
  • And then you have to fork over your trades and they assess whether it’s considered normal or not?
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More or less.

In my opinion they do not check for stock price increases but ask you first for detailed trading records. Because the increase in my wealth could be explained by stock price increases. This year I will provide the “mark-to-market performance” part to avoid those questions.

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Thanks. I’ve only had to ‘explain’ things once when, several years ago, everything went in my favor (stock price appreciating, vesting of equity, bonus, timing, etc.) and the surge in assets triggered a request for an explanation.

I suspect in my case my detailed UBS tax report (one of the benefits of paying UBS fees…) clarifies it all in detail anyway. I shall review the report in detail this time to see how it accounts for options trading.

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Datalevel: eTax documents for IBKR
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I don’t know what would classify as ‘significant’, but yea it would be around ~5% of my NW.

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See this post (and the corresponding topic) for more details: 6 month holding rule clarification - #5 by Your_Full_Name

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5 posts were merged into an existing topic: Datalevel: eTax documents for IBKR