The German Ministry of Finance has officially released a letter confirming that the sale of crypto assets is tax-free after one year, even if the tokens are used for collateral and lending.
How Germany Taxes Cryptocurrency Gains
The German Ministry of Finance announced on Wednesday that it had issued a letter on cryptocurrency income tax, stating:
This is the first time in the country that there is a unified administrative instruction.
The Treasury Department detailed that at a hearing last year, one of the most vigorously discussed issues was whether the tax-free holding period for crypto lending and staking should be at least 10 years.
The ministry noted that, in coordination with the federal government:
The letter now states that the so-called 10-year period does not apply to virtual currencies.
Cryptocurrency tax firm Koinly explained that in Germany, cryptocurrencies are considered “a private asset,” meaning “it is subject to personal income tax rather than capital gains tax,” stressing that Germany “only sells cryptocurrencies within the same year.” Only tax cryptocurrencies” is a buy. “
Koinly elaborates further:
As a “private sale” in Germany, crypto gains are fully tax-free after one year of holding.
“Furthermore, profits from cryptocurrency sales of up to €600 per calendar year remain tax-free,” the company added, noting that previously, “when it comes to cashing out staked cryptocurrencies, a tax-free holding period of at least 10 years.”
Crypto advisor Patrick Hansen explained on Twitter, citing a letter issued by the Treasury Department:
Even if used for staking/lending, crypto assets acquired after one year of sale will still be tax-free.
Parliamentary State Secretary Katja Hessel commented: “For individuals, bitcoin and ether obtained from the sale are tax-free after one year. The period will not be extended to 10 years, even if bitcoin was previously used for lending, or taxpayers Offer ether as someone else’s stake.”
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