With the growing importance of virtual currencies, the German Federal Ministry of Finance (BMF) has published a letter providing administrators, individuals, and business owners a complete guide on the recognition and taxation of digital assets, such as Bitcoin (BTC) and Ethereum (ETH).
The BMF letter discusses several crypto facts that are described and classed technically under income tax legislation. This applies to block generation as well as the buying and selling of Bitcoin or Ether. Staking, lending, hard forks, airdrops, income tax peculiarities of utility and security tokens, and tokens as employee income are all covered in the BMF letter.
This is the first time a nationwide, uniform, administrative “rule book” is available in Germany.
It appears the sale of Bitcoin (BTC) and Ethereum (ETH) would not be taxed in Germany, after holding for one year. The same has been said for staking.
Parliamentary State Secretary Katja Hessel said,
“For individuals, the sale of acquired Bitcoin and Ether is tax-free after one year. The period does not extend to ten years even if, for example, Bitcoin were previously used for lending”
The Federal Ministry of Finance will continue to work on income tax concerns involving Bitcoin (BTC), Ethereum (ETH), and other tokens in close collaboration with the federal states’ top tax authorities and with the participation of trade groups.
She stated,
“Of course, the upcoming official publication of the BMF letter is not the end of our examination of the topic, but an interim result. The rapid development of the ‘cryptoworld’ ensures that we do not run out of topics. A supplementary letter on the obligations to cooperate and record is already in progress.”
The crypto markets were shocked when massive liquidations hit the charts, bringing prices of all big tokens down. Bitcoin at press time was trading at $31,658.09, down 15.7% on the weekly chart, while Ethereum was trading at $2,425.10, down 12.4% on the same.