Taxation of Crypto Currencies like Bitcoins, Ethereum, IOTA

Taxation of Crypto Currencies like Bitcoins, Ethereum, IOTA

Taxation of cryptocurrencies in Germany

You are resident in Germany and trading with Bitcoins, Ethereums, IOTA coins or similar crypto currencies? What will be the tax impacts on your portfolio?

List of services:

  • Tax advisory in connection with the documentation and calculation of gains / losses including individual potential tax saving options
  • Correct consideration of losses (if applicable)
  • Correspondence with the competent tax office, in particular cover letter including explanations and argumentation for tax-free crypto gains if you fulfilled the minimum holding period

Private Investments

From a German tax perspective, income deriving from crypto currencies is deemed as other income and not as capital gains. Hence, crypto gains will be tax-free if a minimum holding period of 12 months between the acquisition and sale of each coin is fulfilled. Otherwise, it is taxable.

In general there are certain loss restrictions mostly resulting to a loss carry forward and not to netting with other positive income sources. The determination of income is based on first-in-first-out principle.

Lending of coins will extend the minimum holding period to 10 years. Therefore it is not recommendable to lend coins from a tax perspective.

“Business” Trading

There should be valid arguments that crypto coins are treated as intangible assets. Crypto income is deemed as normal business income. However, there is uncertainty with regard to potential write-offs at year end and which amounts should be used (different market values depending on exchange platform).

Please do not hesitate to contact us in order to offer you an individual consulting which fits to your needs.