Crypto Tax in Germany
Tax authority: Bundeszentralamt für Steuern (BZSt) · Last updated: 2026
Germany is one of the most crypto-friendly tax jurisdictions in the world. If you hold cryptocurrency for more than one year, your gains are completely tax-free — regardless of the amount. Short-term gains also benefit from a €600 exemption. However, the rules around staking, lending, and DeFi are complex and still evolving. Germany does not have a separate capital gains tax category — crypto is taxed as private sales (Privates Veräußerungsgeschäft) under income tax.
Overview
| Classification | Private money (Privates Veräußerungsgeschäft) |
| Capital Gains Tax | Tax-free if held >1 year; otherwise taxed at personal income rate (up to 45%) |
| Holding Period | 1 year — gains are completely tax-free after |
| Cost Basis Method | FIFO (default), LIFO allowed in some cases |
| Reporting Forms | Einkommensteuererklärung, Anlage SO |
Key Rules
- •Crypto held over 1 year is completely tax-free — one of the best regimes in the world
- •Short-term gains under €600 are also tax-free
- •Staking may reset the 1-year holding period (disputed, evolving)
- •Mining and staking rewards taxed as other income
- •No separate capital gains tax category — taxed as private sales
Taxable Events
- !Selling crypto for EUR or any fiat currency (if held <1 year)
- !Trading one crypto for another within 1 year of acquisition
- !Using crypto to pay for goods or services within 1 year
- !Receiving crypto as payment for services (income tax)
- !Mining rewards (taxed as other income at receipt)
- !Staking rewards (taxed as other income — holding period impact debated)
Not Taxable
- ✓Selling crypto held for more than 1 year (completely tax-free)
- ✓Short-term gains below the €600 annual exemption
- ✓Buying crypto with EUR and holding it
- ✓Transferring crypto between your own wallets
- ✓Gifting crypto (within gift tax allowances)
Tax Rates
| Income Bracket | Rate | Note |
|---|---|---|
| Held >1 year | 0% | Completely tax-free — Germany's key advantage |
| Short-term gains <€600 | 0% | Freigrenze — if exceeded, entire amount is taxed |
| €0 – €11,604 | 0% | Income tax basic allowance (Grundfreibetrag) |
| €11,605 – €66,760 | 14–42% | Progressive income tax rate |
| €66,761 – €277,825 | 42% | |
| €277,826+ | 45% | Plus 5.5% solidarity surcharge on tax |
Common Scenarios
The 1-year holding period rule
Under current German tax law (§23 EStG), individuals who hold crypto for more than one year and then sell it may be completely exempt from income tax on the gain — regardless of the amount. This makes Germany one of the most attractive jurisdictions for long-term crypto holders. Note: this applies to individuals, not companies. Track your acquisition dates carefully and consult a Steuerberater for your specific case.
The €600 Freigrenze
Short-term gains (held <1 year) up to €600 per year are tax-free. But this is a Freigrenze (exemption threshold), not a Freibetrag (allowance). If your total short-term crypto gains exceed €600 by even €1, the entire amount becomes taxable — not just the excess. Be very careful around this threshold.
Staking and the holding period debate
Whether staking rewards reset the 1-year holding period for the staked tokens has been heavily debated. The BMF (Federal Ministry of Finance) clarified in 2022 that staking does NOT extend the holding period for the underlying tokens. However, the staking rewards themselves are taxed as other income when received, and their own 1-year period starts from receipt.
DeFi liquidity provision
Providing liquidity in DeFi pools is complex. Depositing tokens into an LP may constitute a taxable swap. Each yield earned is other income. Impermanent loss isn't directly deductible. The German tax treatment of DeFi is still evolving — use conservative reporting and a tax tool that tracks these transactions.
Best Crypto Tax Software for Germany
Frequently Asked Questions
- Is crypto really tax-free after 1 year in Germany?
- Yes. Under §23 EStG (Einkommensteuergesetz), private sales of assets held for more than one year are completely exempt from income tax. There is no cap — even gains of millions of euros are tax-free if the holding period exceeds one year. This applies to individuals, not companies.
- What is the €600 threshold?
- The €600 is a Freigrenze (exemption threshold) for all private sales in a calendar year — not just crypto. If your total short-term private sale gains are €600 or less, they're completely tax-free. If they exceed €600 by even €1, the entire amount is taxable. This is different from an allowance (Freibetrag) where only the excess would be taxed.
- Does the Finanzamt track crypto?
- German tax authorities are increasing crypto oversight. Banks must report crypto transactions in some cases, and Germany participates in international information sharing. The EU's DAC8 directive will require crypto exchanges to report customer transactions to EU tax authorities starting in 2026. The Finanzamt can and does request crypto records during audits.
- How are mining and staking rewards taxed?
- Mining and staking rewards are taxed as 'Sonstige Einkünfte' (other income) under §22 Nr. 3 EStG at the fair market value when received. There's a €256 annual exemption for other income. The BMF confirmed in 2022 that staking does not extend the holding period of the staked coins — only the rewards have their own separate 1-year period.
- Which form do I use to report crypto?
- Crypto gains from private sales go on Anlage SO (Sonstige Einkünfte) of your Einkommensteuererklärung. Income from mining/staking also goes on Anlage SO. You should keep detailed records of all transactions including dates, amounts, and exchange rates — the Finanzamt may request them.
Disclaimer: This guide is for informational purposes only and does not constitute tax advice. Crypto tax rules change frequently. Consult a qualified tax professional in Germany for advice specific to your situation.