Key Takeaways
- Germany’s federal finance ministry issued the country’s first guidance on cryptocurrency taxation.
- Individuals can now sell cryptocurrencies they have acquired tax-free after one year of possession.
- The new regulations also apply to digital assets employed in staking or lending activities.
The federal finance ministry of Germany has issued the country’s first guidance on the income tax treatment of cryptocurrencies and other blockchain-based tokens. The 24-page document covers a variety of crypto-related topics, which are explained technically and classified by German income tax law. The document was released or made available to the public on Tuesday.
Wolfgang Hessel has issued instructions on the taxation of virtual assets such as bitcoin and other cryptocurrencies. The advice comes after the new German government incorporated cryptocurrencies and blockchain technology in its four-year coalition agreement for the country’s future. Wolfganga Hessel is Germany’s Finance Minister,
The 24-page paper includes a wide range of crypto-related matters that are explained technically and classified in accordance with German income tax law.One thing that has to be given most importance is the very fact that the sale of acquired cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH) is now tax-free for individuals after one year of ownership, according to Parliamentary State Secretary Katja Hessel. Furthermore, the new rules apply to digital assets used in staking or lending protocols.
According to the finance ministry, the advice addresses mining, staking, lending, hard forks, and airdrops, as well as the tax implications of buying and selling bitcoin and ether. The German government, according to Hessel, is already working on a supplement paper that will focus on federal-state collaboration and pledges to the issue.
Hessel said, “Of course, the publication of the guidance is not the end of our engagement with the topic, but an interim result,’’
The advice on the income tax treatment of virtual assets was issued six months after the new German government included cryptocurrencies and blockchain technology in its coalition agreement, calling them critical components that will support the country’s development over the next four years.
