Germany Publishes First Nationwide Tax Guide for Crypto

The finance ministry's letter deals with the income tax treatment of mining, staking, lending, hard forks and airdrops.

AccessTimeIconMay 11, 2022 at 1:00 p.m. UTC
Updated May 11, 2023 at 3:41 p.m. UTC
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Germany's federal finance ministry has issued guidance on the income tax treatment of crypto, the first nationwide instructions on the topic, confirming that staked or lent crypto currencies are still tax free if held for over one year.

Individuals can sell bitcoin (BTC) or ether (ETH) tax free after one year, Parliamentary State Secretary Katja Hessel said in a statement.

The guidance deals with issues like mining, staking, lending, hard forks and airdrops, as well as the tax treatment of buying and selling bitcoin and ether, the finance ministry said.

The guide confirms that the one-year period applies even to cryptocurrency that has been lent out or used by someone else as a stake to create new ethereum blocks. Hessel also ruled out applying to crypto the alternative 10-year holding period to be exempt from taxes that applies to non-mobile assets such as land.

In addition, according to the guide, income tax doesn’t apply when redeeming utility tokens, the crypto assets that give a particular right, such as access to a network or to receive a certain product. The finance ministry cited a 2018 court judgment concerning bearer bonds to say redeeming the tokens doesn’t count as a sale under income tax law.

UPDATE (May 11, 14:34 UTC): Added additional information from the guide.


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Jack Schickler

Jack Schickler was a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. He doesn’t own any crypto.

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