Germany announces no tax on cryptocurrency sales for investors holding for one year


According to Katja Hessel, German parliamentary secretary of state, cryptocurrency traders are entitled to a tax exemption on the sale of digital currencies. Also, if you have held the asset for more than a year, you do not have to pay taxes on the money you earn from selling cryptocurrencies.

The German Federal Ministry of Finance guideline Defines blockchain technology ideas such as airdrops, staking, masternodes, mining, and taxes on the sale and purchase of cryptocurrencies.

Related Resources | Crypto is now officially considered a financial instrument in Germany

Germany Issues Crypto Sale Tax Guide

For the first time in Germany, major financial institutions and 16 federal states have had substantive discussions about enacting crypto tax laws in their respective states.

The state secretary already arranged a meeting last summer to evaluate the perspectives of various crypto companies such as Bitkom, market contributors and individual traders.

One of the most important questions about taxes on the sale of digital assets is whether lending or staking cryptocurrencies extends the tax-free period to 10 years. This is the same as chartered real estate.

Secretary of State Katja Hessel emphasized: statement.

For example, the deadline will not be extended to 10 years if Bitcoin has previously been used for a loan or if the taxpayer has provided Ether as a stake to allow someone else to create the block.

Patric Hansen, a renowned EU policy expert who works as crypto business advisor to Presight Capital, reports that a decade of reduced regulation is “the most important demand of the German crypto community”.

Hansen said.

This has already been a huge success and makes Germany a very attractive country in terms of cryptocurrency taxes.

The document issued by the authorities also provides transparency on airdrops, a well-known method of distributing crypto tokens to attract new liquidity and users. For example, earlier this year, Yuga Labs distributed ApeCoin to Bored Ape NFT holders for use within the upcoming BAYC gaming ecosystem.

The German Ministry of Finance has also stated that beneficiaries of airdrops will be subject to income tax while using exchange facilities to access airdrops on social network posts or personal data.

Bitcoin is trading at $28,754, down 0.85% | Source: BTC/USD chart TradingView.com

If someone doesn’t have to do anything to receive the airdrop, they don’t have to pay income tax. However, airdrops, like any other gift, may be subject to tax.

Hansen said.

People usually have to pay tax on airdrops, but there will be many exemptions.

Hansen highlighted another important condition of the regulation on employees who are paid in the form of cryptocurrencies. According to regulators, crypto tokens do not fall into tax brackets unless they are listed on an exchange or have no market value. Thus, it indicates that employee salaries paid in cryptocurrency are not taxable unless they initiate a transaction.

Related Resources | Is Germany truly the No. 1 cryptocurrency-friendly country? Probably not.

Hansen thinks this is good news. But he points out that the letter doesn’t cover everything. In particular, the Ministry of Education still sees digital asset staking via full nodes as a commercial activity, which has a “big tax impact” on the profits earned by full node operators compared to third-party staking providers.

Features Image from Pixabay and chart from tradingview.com

Leave a Comment