Disclaimer: This page is for general information purposes only and should not be used as a substitute for consultation with tax professionals or other advisors. The general tax guidance of the German Federal Tax Office or Bundeszentralamt für Steuern (BZSt) does not address all the various cryptocurrency transactions and resulting tax implications. Guidance from the BZSt may be supported or challenged by the German courts.

Is cryptocurrency taxable?

Cryptocurrency is treated as Other Assets for German tax purposes. The taxable events of crypto transactions are treated as Other Income (here on referred to as “other income”), which is referred to as Profit/Loss (here on referred to as “profit/loss”) in the tax form Anlage SO.

How is my cryptocurrency taxed?

When you either dispose of cryptocurrency or receive it as income, it will be subject to other income and displayed as profit/loss in the tax form (Anlage SO). In general, it is calculated by using the proceeds less the cost basis and selling transaction fee of the crypto.

Crypto.com Tax generates crypto tax data for users who are engaging in cryptocurrency transactions, not as a business activity. Users participating in cryptocurrency transactions that constitute business activities cannot apply these calculations for the German income tax reporting. Therefore, this may not be the right tool for you if your crypto transactions constitute business activities as opposed to hobby transactions.

Cryptocurrency tax deadline

Taxable cryptocurrency transactions need to be reported on your German tax form Anlage SO 2021. The filing deadline is July 31 of the year following the assessment period (e.g. FY21 tax return has to be filed by July 31, 2022). The deadline would be postponed to the next working day if this falls on a weekend.

If the tax return is prepared by a tax advisor, the filing deadline is extended to February 28 two years after the assessment period (e.g. FY21 tax return has to be filed by February 28, 2023).

How do I file crypto tax reports?

Crypto.com Tax is a user-friendly online crypto tax calculation tool. Please follow the below steps to avail of the tool.

  1. Register your account in Crypto.com Tax

  2. Import your transactions in our product in 5 ways:

    1. API synchronization with the supported wallets/exchanges

    2. Import with supported blockchain public address: BTC and ETH & ETC-20 Tokens

    3. Import the CSV file exported from our supported wallets/exchanges

    4. Import our Generic CSV Template for the non-supporting wallets/exchanges

    5. Manually add your transactions

  3. Generate the below tax reports on the page of Tax Reports :

  1. Profit/loss - Disposal CSV file to fill in the form Anlage SO for lines 42-47

    1. Report the Proceed (EUR) to line 44

    2. Report the Cost basis (EUR) to line 45

    3. Report the Selling Expense (EUR) to line 46

    4. Report the Profit/loss (less than or equal to 12 months) to line 47

    5. If you have more than one disposal, please add an attachment to include all the transactions

  2. Profit/loss - Receiving Income CSV file to fill in the form Anlage SO for lines 42-47

    1. Report the fair market value (EUR) to line 44

    2. Report 0 cost basis to line 45

    3. If you have more than one transaction of receiving income, please add an attachment to include all the transactions Transaction history CSV file for keeping the books and records

Tax Rules on Crypto Transactions

Buying cryptocurrency (e.g. EUR → BTC)

Buying cryptocurrency is not considered a taxable event. However, it’s extremely important to keep track of the acquisition cost (with associated fees), as it becomes the cost basis of the cryptocurrency and will be used for calculating profits/losses for subsequent taxable events (i.e. dispositions, etc.)

Selling cryptocurrency (e.g. ETH → EUR)

Selling cryptocurrency for fiat currency is considered a taxable event. It is treated as other income for German tax purposes. The profits/losses can be calculated by subtracting the cost basis and the associated fees* from the proceeds.

If the holding period of the coins is equal to or less than 365 days, the disposal transaction will be subject to profit/loss. However, the disposal transaction is not taxable if the holding period is over 365 days.

* Discuss more details in the later session of fee treatment


In addition, the total profits (other income) would be tax-free if it does not exceed EUR 600 in the current tax year. However, the first EUR 600 profits are taxable when exceeding the threshold. Losses can only be offset with respective profits deriving from other income.

Example 1:

  • Buy 10 ETH for EUR 10,000 on 1 Feb 2020

  • Sell 5 ETH for EUR 10,000 on 31 Jan 2021

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 10,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit: EUR 10,000 - 5,000 = EUR 5,000

Example 2:

  • Buy 10 ETH for EUR 10,000 on 1 Feb 2020

  • Sell 5 ETH for EUR 10,000 on 2 Feb 2021

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 10,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss: EUR 10,000 - 5,000 = EUR 5,000

  • Since the holding period before disposal is less than 365 days, EUR 5,000 is not taxable.

Trading one cryptocurrency for another (eg. ETH → BTC)

Selling cryptocurrency for another cryptocurrency is considered a taxable event. The profits/losses can be calculated by subtracting the cost basis from the FMV (fair market value) of the coins you receive.

Example:

  • Buy 10 ETH for EUR 10,000

  • Sell 5 ETH for 1 BTC (FMV per BTC is EUR 12,000)

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 12,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss: EUR 12,000 - 5,000 = EUR 7,000

Sending cryptocurrency to others

Payment

Paying cryptocurrency for services and goods is considered a taxable event. The profits/losses can be calculated by subtracting the cost basis from the FMV (fair market value) of the coins you send.

Example:

  • Buy 10 ETH for EUR 10,000

  • Send 5 ETH for some service (FMV per ETH is 2,000)

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 2,000 * 5 = EUR 10,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss: EUR 10,000 - 5,000 = EUR 5,000

Gift

Sending a gift is not subject to profit/loss (other income). Also, it would be non-deductible as well. However, the donor may be subject to gift tax if the gift exceeds the threshold. For example, gifts are tax-free up to a value of EUR 20,000 for friends and higher for spouses.

Donations

Donating cryptocurrency is considered a non-taxable event. Therefore, it is similar to sending a gift that no profit/loss would be triggered at donation. Also, it would be non-deductible as well.

Receiving cryptocurrency other than direct purchase or transfer

Both receiving cryptocurrency and its subsequent disposal are considered taxable events, except receiving the crypto as a gift, mining, and fork. This will apply to multiple cases, including airdrops, payment (e.g. employment income), receiving rewards (e.g. staking rewards or referral bonus), and rebates. That means all the cryptocurrency you receive will be taxable as other income at FMV. The income should be reported on form Anlage SO. Also, they will be subject to profits/losses at future dispositions. The profit/loss is calculated by subtracting the cost basis from the FMV of the cryptocurrency on the date of disposition.

Mining

Since mining activities are treated as commercial (business) activities, the received coins from mining are not taxable at the time of receipt for hobbyist investors. However, they are subject to profits/losses at dispositions. The cost basis of the received coins is equal to the FMV at the time of receipt. The profit/loss is calculated by subtracting the cost basis from the FMV of the cryptocurrency on the date of disposition.

In general, the related cost of mining such as electricity costs/ buying equipment is categorized as allowable expenses.

Example:

  • Receive 10 ETH from mining (FMV per ETH is EUR 1,000)

  • Sell 5 ETH for 1 BTC (FMV per BTC is EUR 12,000)

Results:

  • Proceeds: EUR 12,000

  • Cost basis = FMV at the date of receiving the mining income

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss: EUR 7,000

  • Not taxable at the time of receipt

Forks

Fork takes place when there is a split on the new cryptocurrency that you currently hold. The new coins that you receive from the hard fork are not taxable and have a zero-cost basis. However, they are subject to profits/losses when you dispose of them. The profit/loss is calculated by subtracting the zero-cost basis from the FMV of the cryptocurrency on the date of disposition.

In fact, the German Ministry of Finance (BMF) proposed that the cost of the original token is apportioned between the old and new token, pro-rata in line with the respective market values of each token the day after the fork. Since this is still in draft status, we would take the more conservative approach that is zero cost basis at the time of receipt.

In addition, a soft fork does not create a new coin so you do not receive any income when it happens.

Gift

The received coins from the gift are not taxable at the time of receipt. However, they are subject to profits/losses at dispositions. The calculation of profits/losses is the same as mining.

Airdrops

Airdrops are basically some free coins you received from a marketing campaign or event.

In general, coins from airdrops are taxable at the time of receipt. Users will have other income equal to the FMV of the new cryptocurrency when it is received. Also, they are subject to profits/losses at dispositions. The cost basis of the received coins is equal to the FMV at the time of receipt. The calculation of profits/losses is the same as mining.

Example:

  • Receive 10 ETH from airdrop (FMV per ETH is EUR 1,000)

  • Sell 5 ETH for 1 BTC (FMV per BTC is EUR 12,000)

Results:

  • Proceeds for disposal: EUR 12,000

  • Cost basis = FMV at the date of receiving the mining income

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss for disposal: EUR 7,000

  • Profit/loss for receiving the income: EUR 1,000*10 = EUR 10,000

Rewards

You can get crypto rewards in several ways, including but not limited to:

  • Stake/ Earn rewards and bonus

  • Referral bonus

In general, the reward income is taxable at the time of receipt. Similar to airdrop, users will have other income equal to the FMV of the new cryptocurrency when it is received. Also, they are subject to profits/losses at dispositions. The cost basis of the received coins is equal to the FMV at the time of receipt. The calculation of profits/losses is the same as mining.

Payment (Salary)

If the cryptocurrency received is a payment to you as a form of compensation, it may be considered your salary. The FMV of the received coins becomes taxable employment income for that year and should be reported on line 6 in the form “N 2021” (so-called "Lohnsteuerbescheinigung"). Please note that the employer should provide the employee with the relevant information at the year-end to fill out the form.

Each individual is responsible for calculating and reporting income on their tax return even if a payor has not supplied appropriate documentation. The FMV of the cryptocurrency received as salary will be the cost basis for future disposition.

Example:

  • Receive 10 ETH as salary (FMV per ETH is EUR 1,000)

  • Sell 5 ETH for 1 BTC (FMV per BTC is EUR 12,000)

Results:

  • Proceeds: EUR 12,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Profit/loss: EUR 7,000

  • EUR 10,000 should be reported as other income from wages/salaries at the time of receipt

Rebate

Rebate means “cashback” from credit cards and staking. In general, the reward income is taxable at the time of receipt. Similar to airdrop, users will have other income equal to the FMV of the new cryptocurrency when it is received. Also, they are subject to profits/losses at dispositions. The cost basis of the received coins is equal to the FMV at the time of receipt. The calculation of profits/losses is the same as mining.

Transferring cryptocurrency between your own accounts

Transferring cryptocurrency between your own accounts is generally not considered a taxable event when the associated fee is in fiat. However, a portion of the transaction may be taxable if the associated fee is in cryptocurrency as there will be a difference between the FMV of the cryptocurrency disposed to settle the fee versus its adjusted cost basis. See additional information on fees below.

Swapping a cryptocurrency to another one

Token migration means whenever an old coin swaps with a new coin e.g. MCO converting to CRO. It is generally not considered a taxable event when the associated fee is in fiat. Basically, the tax logic is the same as a transfer. A portion of the transaction may be taxable if the associated fee is in cryptocurrency as there will be a difference between the FMV of the cryptocurrency disposed to settle the fee versus its adjusted cost basis. See additional information on fees below.

Cost

Users may incur expenses when the blockchain transaction is approved/failed/canceled. For example, a gas fee is charged due to a failed blockchain transaction. We call this type of transaction Cost. It is not subject to other income for German tax purposes.

Margin trading

Margin trading of cryptocurrency involves profit/loss including the following cases:

  • Closing the position

  • Payment of interest by cryptocurrency

  • The forced sale of your collateral by exchanges

Crypto.com Tax does not support margin trading transactions at this moment. Please consult your tax advisor if you’re actively involved in margin trading.


Other Tax Rules

Fee treatment

Fees can show up in all kinds of cryptocurrency transactions and are often the most cryptic part when calculating taxes. To understand the fee treatment thoroughly, we need to consider the following cases.

Fee in nontaxable events (e.g. buy)

Typically in a nontaxable event, the FMV of the fee will be added to the cost basis of the resulting coins. The idea is simple - the fees you pay are saved for your future benefits, as they will be considered as part of the cost basis when a disposition happens, offsetting the profit.

However, transfer and swap are the exceptions. The associated fee from them does not increase the cost basis because its intention is to hold the cryptocurrency for investment purposes rather than disposition/acquisition of crypto.

Example 1:

  • Buy 10 ETH for EUR 10,000, with a purchase fee of EUR 100

Results:

  • Cost basis per coin: EUR (10,000 + 100) / 10 = EUR 1,010 per ETH

Example 2:

  • Buy 10 ETH for EUR 10,000 in account A

  • Transfer 5 ETH from account A to account B, with a transfer fee of EUR 50

Results:

  • Cost basis per coin in account A: EUR 10,000/10 = EUR 1,000 per ETH

  • Cost basis per coin in account B: EUR (1,000 * 5 ) / 5 = EUR 1,000 per ETH

Example 3:

  • Buy 5 MCO for EUR 20

  • Swap 5 MCO for 100 CRO due to MCO deprecation

Results:

  • Cost basis per MCO: EUR 20 / 5 = EUR 4

  • Cost basis per CRO: EUR 20 / 100 = EUR 0.2

Fee in taxable events (e.g. sell, trade, send-payment)

In a taxable event, the FMV of the fee is considered as an expense, which is typically deducted separately from the cost basis.

Example:

  • Buy 10 ETH for EUR 10,000

  • Sell 5 ETH for EUR 10,000, with a selling fee of EUR 100

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 10,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Total expense: EUR 100

  • Profit/loss: EUR 10,000 - 5,000 - 100 = EUR 4,900

What if your fee is in cryptocurrency?

This is the most confusing part of all, but we have you covered. When your fee is in cryptocurrency, it should be valued at FMV and will separately result in a profit/loss as it is considered a disposition of capital property. Therefore in taxable events, your transaction can contain up to 2 profits/losses, and they should be separately listed on your transaction records.

For non-taxable events, you’ll just need to calculate the profit/loss from the fee. Note that in a transfer transaction, the FMV of the fee cannot be added to the resulting coins’ cost basis.

Example 1:

  • Buy 10 ETH for EUR 10,000

  • Buy 5,000 CRO for EUR 1000 with a transaction fee of 0.1 ETH

  • Assume the ETH price has gone up to EUR 2,000 on the day of buying CRO

Results:

  • Cost basis per ETH: EUR 10,000/10 = EUR 1,000 per ETH

  • Cost basis per CRO: EUR (1,000 + 200)/5,000 = EUR 0.24 per CRO

  • Profit/loss from the fee = EUR (2,000 - 1,000) * 0.1 = EUR 100

Example 2:

  • Buy 10 ETH for EUR 10,000 in account A

  • Transfer 5 ETH from account A to account B, with a transfer fee of 0.1 ETH

  • Assume the ETH price has gone up to EUR 2,000 on the day of transfer

Results:

  • Cost basis per coin in account A: EUR 10,000/10 = EUR 1,000 per ETH

  • Cost basis per coin in account B: EUR (1,000 * 5 ) / 5 = EUR 1,000 per ETH

  • Profit/loss from the fee = EUR (2,000 - 1,000) * 0.1 = EUR 100

Example 3:

  • Buy 10 ETH for EUR 10,000

  • Sell 5 ETH for EUR 10,000, with a selling fee of 0.1 ETH

  • We know the ETH price is EUR 2,000 on the day of sell

Results:

  • Cost basis per coin: EUR 10,000/10 = EUR 1,000 per ETH

  • Proceeds: EUR 10,000

  • Total cost basis for 5 ETH: EUR 1,000 * 5 = EUR 5,000

  • Transaction fee: EUR 2,000 * 0.1 = EUR 200

  • Profit/loss from the transaction: EUR 10,000- 5,000 - 200 = EUR 4,800

  • Profit/loss from the fee: EUR (2,000 - 1,000) * 0.1 = EUR 100

  • Total profit/loss: EUR 4,800 + 100 = 4,900

Cost Basis Methods

Per BMF’s guidance, the First In First Out (FIFO) cost basis method is supported for Germany. Please consult your tax advisor if you wish to calculate in other cost basis methods. You may also visit our FAQ for more details about the different cost basis methods.

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