The German Ministry of Finance has published a letter officially confirming that the sale of crypto assets is tax-free after one year, even though the coins are used for mortgages and lending.
How crypto profits are taxed in Germany
The German Ministry of Finance announced on Wednesday that it has published a paper on the income tax of cryptocurrency, stating:
This is the first time that there is a nationwide uniform administrative directive on the subject.
The Finance Ministry elaborated that in the hearing held last year, one of the most intensely discussed questions was whether the tax-free holding period for crypto lending and staking should be a minimum of 10 years.
The Ministry stated that in coordination with the Union States:
The letter now states that the so-called 10-year period does not apply to virtual currencies.
In Germany, cryptocurrency is viewed as “a private asset,” which means “it attracts a personal income tax rather than a capital gains tax,” explained crypto tax firm Koinely, emphasizing that Germany “taxes cryptocurrency only if it is sold within the same year” that it was purchased.
Further detailed:
As a ‘private sale’ in Germany, crypto gains are completely tax-free after a one-year holding period.
“Furthermore, gains of up to €600 per calendar year on crypto sales remain tax-free,” the firm said, noting previously, “When it comes to redeeming bet crypto, the tax-free holding period is minimal. 10 years.”
Citing the letter published by the Ministry of Finance, crypto consultant Patrick Hansen explained on Twitter:
The sale of acquired crypto assets will remain tax-free after one year, even if it is 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. This period is not extended to 10 years, even if, for example, bitcoin was previously used.” was done for lending or the taxpayer provided the ether as a stake to someone else.”
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