Germany: zero capital gains tax on Bitcoin
Germany: zero capital gains tax on Bitcoin

Germany: zero capital gains tax on Bitcoin

By George Michael Belardinelli - 13 Sep 2022

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Germany has explained that capital gains on Bitcoin are to be considered tax-free, provided they remain on the wallet for more than one year. 

Zero tax on Bitcoin capital gains in Germany

Individuals in Germany will not be subject to tax on capital gains from transactions in Bitcoin or Ether or other currencies, provided they have held the income stationary for at least one year.

In the specification published on 10 May and taken up for clarification and explanation by the German Minister of Finance, the following day it is clarified that cryptocurrency income from staking, lending and airdrop are included in the above conditions, unofficially assigning the country the label of crypto-friendly. 

Even BTC or ETH if used for staking and/or lending will be tax-free if these have a minimum duration of one year.

The country is believed to be crypto’s biggest friend, at least according to a report published by CoinMarketCap recently. 

Coincub, author of its Global Crypto Ranking, quite unexpectedly ranked Germany first, undermining Singapore in the quarterly report it published. 

The country has the most Bitcoin nodes per capita surpassing the United States. In recent months, it has given important signals that stretch its determined hands to the world of digital currencies. 

The Federal Financial Supervisory Authority has granted a business license for cryptocurrency custody for Coinbase in Germany and has brought in some interesting initiatives with other companies.

The financial system in Germany is becoming increasingly crypto-friendly

Deutsche Boerse, a large financial operator, has listed more than 20 crypto products on a kind of digital exchange called Xetra.

This picture is accompanied by the news, which is also crypto-friendly, that Sparkasse Savings Bank is looking to promote crypto wallets for exchanging digital currencies to its account holders, which will act as a driver to radicalize digital currencies in the country by broadening the cryptocurrency customer base.

The relationship with crypto in the rest of the world

Singapore, once the homeland of Bitcoin and co., no longer occupies the top step of the podium partly because of the tightening of guidelines on virtual asset service providers by the Monetary Authority and especially the huge upgrade that other countries have made over the years. 

Countries like America or Australia have distinguished themselves, for example, in ETFs and NFTs, the growth of companies in the sector, and an information campaign aimed at the population that does not demonize the asset, but explains it to ordinary people. 

Finally, the ever-observant Switzerland, which when it comes to finance does not let a single opportunity slip by, rounded out the top five countries, distinguishing itself in technological innovation, including ETH in the BBVA Bank’s cryptocurrency service, declaring Bitcoin for all intents and purposes as legal tender limited to the city of Lugano.

Other countries have distinguished themselves by subsidized taxes besides the Teutonic ones. Hungary, for example, charges a flat tax rate of 15%, Cyprus 12.5% (but only for residents), Nigeria 20%, while Malta boasts taxation between 5% and 35%, depending on amounts, duration of deposits and use of crypto in the portfolio.

Germany’s push into the cryptocurrency market

Germany, which has always been Europe’s locomotive from an economic standpoint, thus continues its efforts that will hopefully bring unprecedented successes and targets. 

Opening up to such a booming market capable of fielding significant numbers, despite its young age, will bring new life to the country by attracting capital that previously found no way to express itself and be invested by acting as a magnet even for younger investors who are also the most open to this asset. 

The rule behind it is that if capital is accumulated in Germany and the earnings remain there for one or more years, then there will be zero taxation

That is the idea behind the German reasoning, at least as far as this phase is concerned. 

The German finance minister has emphasized that this helping hand extended to the HODLers does not necessarily last forever, not because it represents some sort of promotion to the world of digital currencies, but rather because the country remains very attentive to the evolution of this world. 

In the more or less near future, it may be in Germany’s interest to apply congruous taxation to deposits and transactions in contrast to what has been done so far. 

The possibility of backtracking, however, is not to be considered anywhere near likely at the moment, and German savers may enjoy zero taxes on capital gains for a long time to come. 


George Michael Belardinelli

A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality

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