Understanding cryptocurrency taxation in Germany
Cryptocurrencies are taxed as "private money" (Privatvermögen) under §23 EStG for individuals. Key rules:
- Short-term gains: Taxable if disposed within 12 months (14–45% rate + 5.5% solidarity surcharge).
- Long-term gains: Tax-free after 12 months.
- Businesses: Always taxed on crypto profits.
German Crypto Tax Rates Explained
| Holding Period | Tax Rate | Notes |
|---|---|---|
| <12 months | 14–45% | +5.5% surcharge; €600 annual exemption |
| ≥12 months | 0% | Full exemption |
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Taxation by Transaction Type
1. Buying & Holding
- No tax on EUR purchases.
- Hold 12+ months for tax-free gains.
2. Selling/Spending Crypto
- Taxable if sold within 12 months.
- FIFO method required (BMF 2022 ruling).
3. Mining & Staking
- Rewards taxed as income at receipt.
- 12-month clock starts at acquisition.
4. Crypto-to-Crypto Trades
- Counts as two disposals (BTC → ETH = sell BTC + buy ETH).
- Same 12-month rule applies.
5. Crypto Payments (Salary/Freelance)
- Taxed as ordinary income at receipt.
Key Compliance & Deductions
- Losses: Offset short-term gains only; no carryover to wages.
- DeFi: Yield farming = ordinary income; gas fees deductible.
- Corporate Tax: 15% CIT + 14% trade tax (no 12-month exemption).
Tax-Free Strategies
- Hold coins 12+ months.
- Keep annual gains under €600.
- Wallet transfers (self-owned) are non-taxable events.
FAQ Section
How are crypto gifts taxed?
Gifts may trigger inheritance tax if exceeding €20,000–€500,000 (based on relationship).
Are NFTs taxable?
Yes, treated like other crypto assets (12-month rule applies).
Foreign exchange reporting?
German tax residents must declare worldwide crypto holdings.
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Filing & Record-Keeping
- Deadlines: July 31 (or Feb-end with tax advisor).
Records: Retain for 10 years (§147 AO):
- Transaction dates/EUR values
- Wallet addresses
- Mining cost proofs
Pro Tip: Use ELSTER for streamlined reporting.
This guide reflects 2025 German tax laws. Consult a professional for personalized advice.