Eternity Law International — News — Crypto taxes in Germany

Crypto taxes in Germany

Published:
October 26, 2022

Germany sets favorable tax space for individual assets in cryptocurrencies. Next, we will look at some of the most important aspects of the law governing the crypto taxes in Germany. Let’s try to find out all features of recommendations of German Federal Tax Office and Ministry of Finance for individuals, and also analyze how the conditions differ for legal entities. Thus, we offer you to consider short crypto tax guide Germany.

  1. Personally owned digital assets shouldn’t be taxed if they are held for 12+ months.
  2. You don’t need to pay taxes on an individual total income from crypto-currencies up to 600 EUR.
  3. Individual digital assets do not need to pay VAT.

In Germany, digital assets are classified as private monetary means. It denotes although such money is not officially legal tender, you do not need to pay tax on profits from them if the amount of income does not exceed 600 euros. Profit from cryptographic currencies is indicated in official income forms, along with salary.

Thus, how does Germany taxes crypto?

  1. If a company earns 600+ euros in crypto-currency income per year, while the assets were held for less than 12 months, it will be necessary to pay income tax of up to 45% – the rate depends on the type of company’s activity, the residence of the owners and certain other factors.
  2. If the crypto-currency is kept by an individual for more than 12 months, no taxes need to be paid. For long-term saving of more than 12 months, the increase in the price of your digital assets is not taxable.

Cryptographic currency to pay for services

Making purchases with crypto-currencies is similar to operations between cryptographic currencies in Germany. One specific example can be considered. You buy Bitcoin for 8 thousand euros, and after 3 months its price rises to 10 thousand euros. You decide to purchase some technique using the bitcoins you have. In this case, you will need to pay income on profit – that is, for 2 thousand euros that you managed to earn during these three months. But if you postpone the purchase of equipment for a period of more than 12 months, then you will not need to pay tax.

According to principles of cryptocurrency taxation in Germany set by the German Ministry of Finance, the use of an official coin to carry out an action on a cryptographic platform doesn’t influence income taxes liabilities.

Loss of digital assets

German taxes legislation permits businesspersons to compensate for income with losses from previous periods or to carry forward the resulting loss to further tax periods in order to make up for them with profit in the future.

Our qualified lawyers will help you understand all the nuances of the tax regime in more detail, as well as tell you how to properly manage your digital assets in order to properly organize the payment of taxes in Germany. We have been working for many years, and have managed to establish ourselves as professionals who know their business perfectly. Contact us now and we will select for you one of the hundreds of profitable turnkey ready-made companies.

You can see our current offers in the categories “Cryptocoins and licensing of cryptocurrency operations”, “Banks for sale” and “Licenses for sale”.

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