In this guide, we’ll break down everything you need to know about how cryptocurrency is taxed in Germany. We’ll explain the fundamentals of cryptocurrency tax, how different types of transactions are taxed, and share a few tricks that can help you reduce your tax liability.
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In Germany, crypto-assets are taxed when they are earned or disposed of.Â
Disposing of cryptocurrency — such as selling it or trading it away — may be subject to tax depending on how long you held your assets.Â
Disposals after 1 year: Disposing of cryptocurrency after one year is completely tax-free.Â
Disposals after less than 1 year: Cryptocurrency disposals after less than a year are subject to normal income tax rates. You’ll only be required to pay taxes if you earn more than 600€ in short-term capital gains in a year or earn cryptocurrency income.
When you earn cryptocurrency — such as through mining and staking rewards — you’ll pay income tax based on the fair market value of your assets at the time of receipt and your total income for the year through cryptocurrency and other sources.Â
Your short-term cryptocurrency gains and cryptocurrency income are taxed according to your individual Income Tax rate. In Germany, workers get a tax-free allowance of 10,908€.
Here's a look at tax rates for the 2024 tax year.
In addition, individuals who’ve earned more than €10,908 will need to pay an additional 5.5% for the solidarity subcharge.
The BZSt can track cryptocurrency transactions.
The European Union’s Sixth Anti-Money Laundering Directive came into effect in December 2020 and applies to all cryptocurrency exchanges. As a result, all crypto exchanges with customers in EU member states need to register with the EU and collect customer information.
In January 2026, DAC8 will go into effect across the European Union. Crypto-asset service providers (like exchanges and wallets) will be required to report domestic and cross-border transactions to tax authorities.
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In Germany, the tax year runs from January 1st to December 31st. Typically, the deadline for submitting your tax return is July 31st of the following year.
It’s important that you don’t wait until the last minute to submit your tax return. Collecting the information you’ll need to report your taxes takes time, so it’s important to get started as soon as you can.
Remember, tax evasion is a serious crime with serious consequences.
In Germany, tax evasion is punishable by a fine and up to 10 years in prison. Remember, late tax payments are subject to penalty as well. The penalty is 0.25% of your unpaid tax liability per month — which can reach as high as 25,000€ for high-income investors.
Looking for strategies to reduce your crypto taxes while staying compliant with German tax law? Here are three simple tactics that can help you save money.
By simply holding your cryptocurrency for longer than a year, you can ensure that you’ll pay no taxes upon disposal.
If you sell your cryptocurrency as a loss after fewer than 12 months of holding, you can offset capital gains (more on this later).
You can gift crypto to your spouse completely tax-free up to 500,000€. If your spouse is in a lower tax bracket than you, they can potentially save money on a short-term disposal.
As noted above, disposals after 12 months are tax-free in Germany. Here are a few more examples of tax-free transactions.
In Germany, the preferred method for calculating your cryptocurrency taxes is FIFO (first-in-first-out). That means the first coins you acquired chronologically will also be the first that you dispose of.
Buying cryptocurrency with a fiat currency like EUR is not considered taxable.
Selling cryptocurrency you've held for less than a year is taxable. You’ll incur capital gains or losses depending on how the price of the crypto you’re selling has changed since you originally received it.
There is no tax for selling crypto if you’ve held it for longer than 12 months.Â
Spending cryptocurrency is considered a taxable disposal, just like selling cryptocurrency. If your disposal occurs within a year of when you originally acquired it, you’ll incur a capital gain or loss.
Trading a cryptocurrency you’ve held for less than a year for another cryptocurrency is taxable. You’ll incur capital gains or losses depending on how the price of the crypto you’ve traded away has changed since you originally received it.
If you’ve disposed of cryptocurrency for a loss after less than a year of holding, you can use this to offset any taxable gains and reduce your crypto tax liability for the year.
Just as gains on crypto that have been held for more than a year aren’t considered taxable, losses on crypto that have been held for more than a year cannot be used to offset gains.
Relevant exchange/blockchain fees can potentially reduce your tax liability. Fees can be deducted from the proceeds of your sale and reduce capital gains.
Cryptocurrency received as compensation for labour is considered income subject to income tax.
Coins earned from mining cryptocurrency are considered income. Businesses can deduct the costs of relevant expenses such as electricity and equipment. However, hobby miners cannot deduct relevant expenses.
If you dispose of your mining rewards after fewer than 12 months, you'll pay capital gains tax tax depending on how the price of your coins has changed since you originally received them.
Cryptocurrency earned from staking rewards is considered income. If you dispose of your staking rewards after fewer than 12 months, they will be subject to short-term capital gains tax depending on how the price of your coins has changed since you originally received them.
Airdrops may be taxable depending on the specific circumstances.
Airdrop proceeds are considered taxable income if you took specific actions to receive it, such as paying gas fees to claim your tokens or sharing a social media post about the airdrop.
However, if you took no action to receive the airdrop, it will be considered non-taxable.
A hard fork occurs when a blockchain splits into two, and investors receive new units of cryptocurrency. One example is the Bitcoin Cash hard fork in 2017, when existing BTC holders received BCH.
New units of cryptocurrency that are received due to a hard fork are not considered taxable. However, you will be taxed if you dispose of your coins within 12 months of receiving them.
At this time, the German government has not provided any guidance on NFTs. It’s likely that they’ll be taxed similarly to other crypto-assets.
Buying NFTs with crypto: It’s likely that buying NFTs with cryptocurrency will be considered a disposal of your crypto. You’ll pay capital gains tax if you acquired your crypto less than 12 months ago.Â
‍Selling/Trading NFTs: As a result, it’s likely that disposing of NFTs after less than 12 months will be subject to income tax while disposing of NFTs after more than 12 months will be tax-free.
In addition, it’s important to remember that buying NFTs with cryptocurrency will be considered a taxable disposal if you’ve held your crypto for less than 12 months.
Minting NFTs: If you mint an NFT as a creator, it’s likely that revenue from primary and secondary sales will be taxed as income.Â
At this time, the German government has not provided any guidance on DeFi. It’s likely that DeFi transactions will be taxed according to the following rules.
Stablecoins are taxed similarly to other crypto-assets. Selling stablecoins or trading them for other cryptocurrencies after less than a year is considered taxable (though it’s likely that your taxable gain will be close to 0).
Cryptocurrency gifts are tax-free up to a certain point — €20,000 for friends and €500,000 for spouses. Larger gifts are subject to gift tax, which can range from 7-50%.
It’s important to keep detailed records of your cryptocurrency transactions. You should keep track of the following information for at least 5 years.
If you have taxable cryptocurrency income, you will need to fill out at least two tax forms. Both of these forms can be filed online via Elster (Elektronische Steuererklärung) — the BZSt's online tax platform.
Any German taxpayer who has earned income or received capital gains from any asset class needs to fill out this form. Here, you’ll enter general tax information — such as salary from your job and your German bank account.
This form is designed to help taxpayers report income from property tax. It can also be used to report income and short-term capital gains from cryptocurrency.
Tracking your cryptocurrency income and capital gains can be difficult, especially if you’re using multiple wallets and exchanges.
Crypto tax software can save you hours of time and effort. Instead of manually tracking your trading, you can automatically import dozens, hundreds, or even thousands of transactions from your blockchains and exchanges of choice.
With CoinLedger, it’s never been easier to file your cryptocurrency taxes. You can file your taxes in three simple steps.
Step 1: Import your wallets and exchanges to CoinLedger.
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Step 2: Let the platform pull your transactions automatically and calculate your tax bill! Â
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Step 3: Download your tax report.
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Filing your taxes with CoinLedger just takes minutes. The platform is trusted by more than 500,000 crypto investors all across the globe!
Let’s cap things off by answering some frequently asked questions about cryptocurrency taxes.
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This guide breaks down everything you need to know about cryptocurrency taxes, from the high level tax implications to the actual crypto tax forms you need to fill out.
