Germany Announces Crypto Gains Tax-Free After One Year

BANKING AND ECONOMY

The German government announced that the sale of crypto assets is tax-free after 1 year even if the coins are used for staking and lending. The step was taken to cement its position as a digital currency-friendly country and to support the digital currency industry. In Q1 of 2022, Germany surpassed Singapore to become a digital currency-friendly nation.

This is the first-ever initiative in the country that will bring nationwide uniform administrative law ‘Germany Crypto Tax Guide 2022’ on cryptocurrency. The law was passed after the country’s Ministry of Finance discussed with the highest financial authorities of the federal states whether the tax-free holding period for crypto lending and staking a minimum of 10 years.

The German Ministry of Finance (BMF) has issued the country’s first comprehensive guidance on the income tax treatment of digital currencies. 

The decision was a result of the hearing that took place in 2021 where many crypto associations and stakeholders voiced concern over the tax-free holding period of crypto lending and staking.

In Germany, cryptocurrencies are considered a private asset, because of which it attracts an individual income tax rather than a capital gains tax.

As per the new guidelines, for private individuals, the sale of purchased [BTC] and Ether is tax-free after one year. Previously, the staked digital currencies are tax-free only after ten years of holding. 

 

   Important points for the exam:

  • The German Ministry of Finance announced that the sale of crypto assets is tax-free after 1 year even if the coins are used for staking and lending.
  • The Ministry issued the country’s first comprehensive guidance ‘Germany Crypto Tax Guide 2022’ on the income tax treatment of digital currencies. 
  • This is the first-ever initiative that was taken to cement its position as a digital currency-friendly country and to support the digital currency industry.
  • As per the new guidelines, for private individuals, the sale of purchased [BTC] and Ether is tax-free after one year. Previously, the staked digital currencies are tax-free only after ten years of holding. 
  • Recently, the Central African Republic has become the second country in the world to adopt bitcoin as its official currency, after El Salvador.

   Facts to know:

  • Capital of Germany: Berlin.
  • Currency of Germany: Euro.
  • Chancellor of Germany: Mr.Olaf Scholz.
  • Examples of Cryptocurrency: Bitcoin, Ethereum, Ripple, Litecoin, zCash, etc.
preparing for jeet

Preparing for Govt. Exams?

Here is you path to Jeet

View courses