In the 24-page guide on cryptocurrencies released this week by the German Ministry of Finance, various topics related to cryptocurrencies are classified and technically explained according to the income tax law.
The most striking detail in the guide was that taxpayers would be exempt from tax if they held Bitcoin (BTC) and Ethereum (ETH) assets for more than 1 year. In addition, the expanded exemption to the cryptocurrency tax also covers digital assets that are staked and used in crypto loan protocols.
Before the regulation, it was stipulated that if an asset is sold at the end of a period of more than one year after its purchase, the amount of profit will be subject to tax if a profit is made. On the other hand, crypto assets that are staked and profited in a different way were expected to be held for up to 10 years to be tax-free. With the new tax guidance released this week, Germany now offers a significant tax advantage for cryptocurrency investors.
Another important issue was that the last published guide covers crypto assets obtained through mining, staking, lending and airdrop, apart from cryptocurrency trading.
The authorities stated that they continue to work on policy on the taxation of digital assets and that they want to take a proactive approach to the emerging problems. At the same time, it was reported that the ongoing work was carried out in coordination with federal tax authorities and government agencies. In the statement made by the Ministry, he emphasized that the regulation was handled with a uniform administrative instruction for the first time.
Having a crypto-friendly streak in the European region in 2022, Germany has now shown that it maintains this stance with its latest decision to expand its income tax exemption for crypto investors.