Cryptocurrencies are becoming increasingly popular as a source of income. However, this includes not only the trading of cryptos but also other operations such as
If the holding period of one year is exceeded when trading cryptocurrencies in Germany, the profit from this is tax-free.
For quite some time, it has been repeatedly discussed whether the holding period will be extended to ten years for inflows of cryptocurrencies originating from lending, staking or masternodes. This has now finally been settled by the published final letter of the German Federal Ministry of Finance (BMF) on the taxation of cryptocurrencies.
In addition to many tax offices, the BMF, in its draft version of the BMF letter on the taxation of cryptocurrencies, was of the opinion that the holding period for cryptocurrencies with which income is generated (e.g. in the context of staking or lending) is extended to ten years.
Surprisingly, the new German government has now decided to remove the holding period extension from the BMF letter. All crypto investors can therefore breathe a sigh of relief and confidently forget the feared holding period extension. In any case, the holding period of one year will remain for cryptocurrencies used for staking. Since the publication of the final BMF letter dated May 10, 2022, all tax offices in Germany are bound by this administrative instruction.
The tax assessment of block/staking rewards in Germany is currently problematic. Staking is no longer a completely new phenomenon. Despite this, the law is still tenuous in this area. However, we can make the following considerations:
The BMF takes a differentiated approach in its BMF letter. The BMF distinguishes between two different types of staking. Proof-of-stake mining (so-called forging) refers to a process in which the staker actively participates in the block creation. In this case, the BMF generally assumes that the process is commercial.
The second type of staking is called cold staking. In this case, the staker waives his surrendered units of the cryptocurrency for a certain period of time, although no active participation in the creation of a block takes place. For the cases of cold staking, however, the BMF generally denies the commercial nature. Rather, it is a case of private asset management, which is why taxation must take place in accordance with Section 22 No. 3 EStG (income from other services).
The German tax authorities still do not handle income from the operation of masternodes, lending and staking in a uniform manner. Therefore, we recommend that crypto investors do not declare income from the aforementioned transactions without sound tax advice. We are happy to support you with our expertise in the preparation of your income tax return. Your contact persons are
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