Germany will allow cryptocurrencies to be sold tax-free after one year of ownership, even if they have been used for staking.
The German Federal Department of Finance (BMF) has published its first guidance document on the income tax treatment of cryptocurrencies as well as blockchain-based tokens.
The document, which was published last Tuesday, May 10, has 24 pages and covers various aspects of cryptocurrencies and token holdings from a tax and regulatory perspective. The information in the text details and classifies all aspects related to the declaration of taxes on cryptocurrencies in the country.
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One of the most important points of this document is the one that states that The sale of Bitcoin and Ethereum will remain tax-free, provided that the cryptocurrencies have been in the subject's possession for more than a year. Parliamentary State Secretary Katja Hessel has pointed out that this same regulation will apply to staking cryptoassets and also those held in lending protocols.
This has also been one of the most discussed points among the politicians in charge of preparing the document. In the Section 23 of the German Income Tax Act It is established that if the period between the acquisition and the sale of an asset is greater than one year, the total amount of the profits is tax-free.
Under the previous law, any crypto asset used for staking or in lending protocols had to remain in possession by, At least 10 years, to be tax-free.
Regulation for other sectors related to cryptocurrencies
Beyond the purchase and sale of cryptocurrencies, the new German tax regulation It will also affect cryptocurrency mining, staking, decentralized lending, hard forks, and token launches.
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Hessel noted: “The publication of the guidelines is not the end of the government’s engagement on the topic, but rather an interim outcome. The rapid development of the crypto world ensures that we will not run out of topics.”
According to the Secretary, the German government would already be working on a complementary document that will focus on the Cooperation between the federal states and their commitments in this area.
The publication of this document has taken place just six months after the current governing coalition included cryptocurrencies and blockchain in its coalition agreement, describing them as the key elements that will support the development of the country's economy in the coming years.
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