Crypto taxes in Germany: What you really need to know to be on the safe side

Taxes. With this term many of us get goose bumps directly. While investors and traders primarily concentrate in which project they should invest in, update their portfolio and follow the Bitcoin course with interest, Bitcoin taxes often do not receive the necessary attention.

One thing has become clear in the meantime:

The times of the “Wild West” in the crypto market are finally over. It is more important therefore to have all relevant information about Bitcoin taxes and/or to use suitable software for this purpose.

Who must pay taxes on crypto profits?

Who invests as private investor for itself in Germany in cryptocurrencies, e.g. Bitcoin (BTC), is taxable. Everyone who has a residence in Germany is in principle taxable, even if he has his habitual residence abroad. This means that trading with Bitcoin & Co is taxed according to the place of residence or domicile of the trader. In which country the cryptos are located as data records, e.g. on a crypto exchange, is therefore irrelevant in this context.

Is there a possibility to avoid paying taxes?

Most investors act privately, that means in their own name and for their own account. Profits from such private investments in Bitcoin & Co are subject to the investor’s personal tax liability within the scope of his income taxation. However, they are only considered for tax purposes if they are short-term investments. If more than one year elapses between the purchase and sale of a coin, profits or losses are not tax relevant and therefore not taxable.

From what amount of profit are taxes to be paid?

Profits remain tax-free in total if they amount to less than EUR 600.00 in a calendar year. However, this exemption limit applies to all private sales transactions, not only to profits from trading in cryptocurrencies. Only if all profits from private sales transactions do not exceed the exemption limit the profits remain tax-free.

How to bring more light into the dark

So the topic of taxation is extremely diverse, complex and intransparent, if you want to tackle it on your own. Many questions are still open and cannot be covered in a short article. How are the profits on Bitcoin and Co. exactly calculated? In which period do I have to pay taxes on crypto profits? How does taxation behave when it comes to staking? What documents does the tax office require? And what is really important: How can I optimize my tax burden? The questions just mentioned are only an excerpt and could be supplemented by several other aspects. For a non-lawyer it is more than difficult to keep the overview, but there is a solution! and, a Swiss crypto platform that focuses on tax reports and portfolio tracking would like to introduce the Tax Guide for Germany. This is a summary of the most important crypto taxation topics in Germany, which was created in collaboration with the leading German law firm in the field of crypto taxes, namely Winheller. To make it even easier for you: Accounting’s software can help you manage your taxes and keep an eye on your portfolio.

About Author

Jake Simmons

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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