The German Ministry of Finance has published a letter officially confirming that the sale of crypto assets is tax-free after one year even if the coins are used for staking and lending.
The German Ministry of Finance announced Wednesday that it has published a letter on the income taxation of cryptocurrency, stating:
This is the first time that there is a nationwide uniform administrative instruction on the subject.
The finance ministry detailed that in a hearing that took place last year, one of the most intensely discussed questions was whether the tax-free holding period for crypto lending and staking should be a minimum of 10 years.
The ministry noted that in coordination with federated states:
The letter now states that the so-called 10-year period does not apply to virtual currencies.
In Germany, cryptocurrency is viewed as “a private asset,” which means “it attracts an individual income tax rather than a capital gains tax,” crypto tax firm Koinly explained, emphasizing that Germany “only taxes crypto if it’s sold within the same year it was bought.”
Koinly further detailed:
As a ‘private sale’ in Germany, crypto gains are completely tax-exempt after a holding period of one year.
“In addition, profits on crypto sales up to €600 per calendar year remain tax-free,” the firm added, noting that previously, “When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.”
Citing the letter published by the Ministry of Finance, crypto advisor Patrick Hansen explained on Twitter:
The sale of acquired crypto assets will remain tax-free after one year, even if used for staking/lending.
Parliamentary State Secretary Katja Hessel commented: “For individuals, the sale of acquired bitcoin and ether is tax-free after one year. The period is not extended to 10 years even if, for example, bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else.”
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