Crypto and Taxes in Germany: General Orientation

What you will learn

• How private sales of crypto are generally treated in Germany
• What the one-year holding period and the exemption limit mean
• Why swaps and staking also matter
• Which records to keep

Explanation

In Germany, bitcoin and similar coins held privately are generally treated as "other assets". Gains from selling them can fall under private sales transactions (private Veräußerungsgeschäfte, section 23 of the Income Tax Act, EStG). The Federal Ministry of Finance (BMF) explains its view in a letter on crypto-assets, last updated in March 2025.

• Holding period: under the rules in force for 2025 and 2026, a gain is generally taxable only if you sell within one year of buying. After more than one year, a private sale is generally tax-free. There is political discussion about changing crypto taxation, so check whether new rules apply when you sell.
• Exemption limit (Freigrenze): since tax year 2024, private sales gains are tax-free if the total of all such gains in a calendar year is below €1,000. It is a limit, not an allowance: if the total reaches €1,000 or more, the whole gain is taxable, not just the part above it.
• Taxable gain = sale price − purchase cost − related fees. Gains within the holding period are taxed at your personal income tax rate.
• Swaps: exchanging one coin for another counts as a sale of the first coin, and a new holding period starts for the new coin. Paying with crypto can also count as a sale.
• Staking and similar rewards are generally treated as other income, with its own small annual limit. Details are complex; ask a Steuerberater.

Record keeping: keep for every transaction the date, amount, euro value, fees, the platform or wallet, and transfers between your own wallets. Download exchange reports regularly, because accounts can be closed. Since 2026, crypto providers in the EU must collect and report customer transaction data to tax authorities, but this does not replace your own duty to declare correctly.

Worked example

Hypothetical example: the exemption limit in practice. Assume this is your only private sale in the year and the current rules apply.

1. On 1 March 2025 you buy 0.1 BTC for €3,000 including fees. Cost per 0.05 BTC: €3,000 ÷ 2 = €1,500.
2. Case A: on 1 December 2025 (within one year) you sell 0.05 BTC for €2,000 and pay a €10 fee. Gain: €2,000 − €10 − €1,500 = €490. Below €1,000, so tax-free.
3. Case B: same date, but you sell for €2,600. Gain: €2,600 − €10 − €1,500 = €1,090. The limit is exceeded, so the whole €1,090 is taxable. At a hypothetical personal rate of 30%: €1,090 × 0.30 = €327 (solidarity surcharge and church tax excluded).
4. Case C: you sell the remaining 0.05 BTC on 5 March 2026, more than one year after purchase: generally tax-free under current rules, whatever the gain.

Common mistake

Practice activity

Hypothetical: you bought 1,000 units of a coin for €2,000 on 10 January 2026. On 20 June 2026 you swap all of them for another coin worth €2,950 at that moment, with a €20 fee. You have no other private sales. (a) Is the swap relevant for tax? (b) What is the gain? (c) Is the exemption limit exceeded?

Limitations: the order in which coins count as sold, losses and special cases change results; check with a Steuerberater.

Key takeaways

• Private crypto sales within one year are generally taxable; after more than one year generally tax-free under current rules.
• The €1,000 Freigrenze is a limit, not an allowance.
• Swaps count as sales; staking rewards are treated separately.
• Keep complete records and check current rules with a Steuerberater.

Next step

In the final lesson, you will build your personal crypto plan with allocation limits and a review routine.