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Author: Admin | 2025-04-28
Of crypto, there is no income tax to be paid as long as you haven’t needed to take any action to become the recipient.Ordinarily, you will have to pay taxes in Germany on airdrops that count as other income. Although they are subject to exemptions, they are also taxable income, like gifts are taxable.The German Finance Ministry has described instances where airdrop recipients would have to pay income tax if exchanging access to the airdrop for personal data or social media posts, for example.If crypto gains generated from private sales transactions exceed €600 or you hold on to them for less than a year, they become subject to income tax.Fiat CurrencySo, if €601 or more profit is generated from private sales transactions, this is subject to income taxes. Crypto to crypto and crypto-to-fiat currency sales are also subject to income tax.In Germany, that means you are subject to income tax when you trade crypto for another crypto and euros.Speculative transactions is another label used for crypto tax purposes for these private sales transactions.Section 22 of the Income Tax Act makes provisions for fee deduction as part of the cost basis. The cost basis is your outlay.However, staked or lent cryptocurrencies remain tax-free if held for more than a year. Any crypto fees you pay are deductible for crypto tax purposes.So, your earnings have no tax liability, as any increase in cryptocurrency value stays tax-free.Tax-Free Capital GainsIf you held on to this investment for less than a year, such private sales transactions are taxed at your regular income tax rate. Being in a higher income bracket results in you paying a higher tax rate on these capital gains.Most crypto investors in Germany buy, sell, and trade crypto as capital gains investing activity through a crypto exchange. This income is considered capital
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