The German Ministry of Finance has actually released a letter formally validating that the sale of crypto properties is tax-free after one year even if the coins are used for staking and lending.
How Crypto Gains Are Taxed in Germany
The German Ministry of Finance revealed Wednesday that it has actually released a letter on the earnings tax of cryptocurrency, specifying:
This is the very first time that there is an across the country consistent administrative guideline on the topic.
The finance ministry detailed that in a hearing that happened in 2015, among the most extremely talked about concerns was whether the tax-free holding duration for crypto lending and staking must be a minimum of ten years.
The ministry kept in mind that in coordination with federated specifies:
The letter now states that the so-called 10-year duration does not use to virtual currencies.
In Germany, cryptocurrency is deemed “a private asset,” which indicates “it attracts an individual income tax rather than a capital gains tax,” crypto tax company Koinly discussed, highlighting that Germany “only taxes crypto if it’s sold within the same year it was bought.”
Koinly even more detailed:
As a ‘private sale’ in Germany, crypto gains are totally tax-exempt after a holding duration of one year.
“In addition, profits on crypto sales up to €600 per calendar year remain tax-free,” the company included, keeping in mind that formerly, “When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.”
Citing the letter released by the Ministry of Finance, crypto consultant Patrick Hansen discussed on Twitter:
The sale of obtained crypto properties will stay tax-free after one year, even if used for staking/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.”
What do you consider this German tax law? Let us understand in the remarks area listed below.
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