The German Ministry of Finance has revealed a letter formally confirming that the sale of crypto belongings is tax-free after one year even if the cash are used for staking and lending.
How Crypto Gains Are Taxed in Germany
The German Ministry of Finance introduced Wednesday that it has revealed a letter on the earnings taxation of cryptocurrency, stating:
This is the primary time that there’s a nationwide uniform administrative instruction on the topic.
The finance ministry detailed that in a listening to that passed off final year, some of the intensely mentioned questions was whether or not the tax-free holding interval for crypto lending and staking ought to be a minimal of 10 years.
The ministry famous that in coordination with federated states:
The letter now states that the so-called 10-year interval doesn’t apply to digital currencies.
In Germany, cryptocurrency is seen as “a private asset,” which suggests “it attracts an individual income tax rather than a capital gains tax,” crypto tax agency Koinly defined, emphasizing that Germany “only taxes crypto if it’s sold within the same year it was bought.”
Koinly additional detailed:
As a ‘private sale’ in Germany, crypto features are fully tax-exempt after a holding interval of 1 year.
“In addition, profits on crypto sales up to €600 per calendar year remain tax-free,” the agency added, noting that beforehand, “When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.”
Citing the letter revealed by the Ministry of Finance, crypto advisor Patrick Hansen defined on Twitter:
The sale of acquired crypto belongings 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.”
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