Crypto Taxes in Germany | Advice by Cryptocurrency Attorneys

Taxation on crypto transactions for private investors

For the private investor of Bitcoins, Ether and other coins, it is essentially relevant how the disposal is taxed. A sale is, for example, the sale of Ether against euros via a trading platform. However, the use of Ether as a means of payment also constitutes a disposal, i.e. if the Ether holder pays for the purchase of goods or services with the cryptocurrency.

In both cases, private sales transactions – also still known as “speculative transactions” – exist within the meaning of Section 23 (1) No. 2 of the German Income Tax Act (Einkommensteuergesetz, EStG), provided that the crypto assets were previously acquired. The question of acquisition therefore represents an essential aspect in the question of taxation, especially if the cryptos have been held for more than one year.

In fact, the classification as a speculative object for tax purposes means that capital gains are completely tax-free after a holding period of at least one year. However, not all cryptocurrencies that are sold were previously “acquired” within the meaning of this provision, as the sellers obtained them by means other than simply buying them on an exchange. In each individual case, it must therefore be examined whether Section 23 (1) No. 2 EStG applies at all. We will be happy to assist you in this regard and with any questions regarding cryptocurency taxes in Germany.