According to the new Germany nationwide tax guidance, German citizens will not pay taxes on the sales of digital assets like Bitcoin and Ethereum after the first year of ownership.
On May 10, the German ecosystem received its first outlined nationwide tax guidance on the income tax treatment of cryptocurrencies and other blockchain-based assets.
The 24-page document, shared by the Federal Ministry of Finance (BMF), formally outlined and defined blockchain concepts such as airdrops, mining, staking, among others, and also addressed various aspects of cryptocurrency issues related to the country’s income tax system.
According to the released documents, crypto investors will no longer pay taxes on the sale of purchased digital assets such as Bitcoin, Ethereum, and Sol, among others, as long as they are held for more than one year.
The new tax policy also applies to digital assets in lending or staking protocols. Katja Hessel, the parliamentary state secretary, when answering questions about long-term staking of cryptocurrencies stated:
“For private individuals, the sale of purchased Bitcoin and Ether is tax-free after one year. The deadline is not extended to ten years if, for example, Bitcoin was previously used for lending or the taxpayer provided ETH as a stake for someone else to create their block.”
The recently released decree, drafted in close consultation with the sixteen federal states and leading financial institutions, makes it the first time that Germany has issued a nationwide income tax guidelines for cryptocurrency assets.
Furthermore, the newly released guidance has been flagged as an interim result and does not mark the end of its cryptocurrency trading law as the government believes that the crypto world is evolving rapidly and new laws need to be enacted at each stage of development.
According to Hessel, “the publication of the guidance is not the end of our engagement with the topic, but an interim result,” and “the rapid development of the ‘crypto world’ ensures that we do not run out of topics.”
