A letter from the German Ministry of Finance confirms that selling crypto assets after one-year is exempted of tax, even though the funds are being used for lending and staking.
Germany Taxes Crypto Gains
Wednesday was a day of celebration for the German Ministry of Finance. It published a statement on cryptocurrency income taxation.
It’s the first time the topic has been addressed in a uniform national administrative directive.
The finance ministry explained that during a hearing held last year, one the most talked about questions was whether the minimum tax-free holding period to allow crypto lending or staking should be at least 10 years.
In coordination with the federated state:
This letter confirms that virtual currencies are not subject to the 10 year period.
In Germany, cryptocurrency is viewed as “a private asset,” which means “it attracts an individual income tax rather than a capital gains tax,” crypto tax firm Koinly explained, emphasizing that Germany “only taxes crypto if it’s sold within the same year it was bought.”
Koinly provides more details:
As a ‘private sale’ in Germany, crypto gains are completely tax-exempt after a holding period of one year.
“In addition, profits on crypto sales up to €600 per calendar year remain tax-free,” the firm added, noting that previously, “When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.”
Patrick Hansen (crypto advisor) explained the details on Twitter, citing the Ministry of Finance’s letter.
A crypto asset acquired after one year will not be subject to tax, regardless of whether it is used for staking or lending.
Parliamentary State Secretary Katja Hessel commented: “For individuals, the sale of acquired bitcoin and ether is tax-free after one year. The period is not extended to 10 years even if, for example, bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else.”
How do you feel about the German tax code? Leave your comments below.
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