How Is Crypto Taxed in Germany?

Germany taxes cryptocurrency as a private asset (privates Veräußerungsgeschäft) under §23 of the Income Tax Act (EStG). Short-term gains — from assets held less than one year — are subject to progressive income tax rates ranging from 0% to 45%, plus a 5.5% Solidaritätszuschlag surcharge on the tax itself. However, if you hold your crypto for longer than 12 months before selling, your gains are completely tax-free. This 1-year Spekulationsfrist makes Germany one of the most favorable jurisdictions in Europe for long-term crypto holders.

The 1-Year Holding Period Exemption (Spekulationsfrist)

The cornerstone of German crypto taxation is the Spekulationsfrist defined in §23 Abs. 1 Nr. 2 EStG. If you acquire a cryptocurrency and dispose of it after holding it for more than one year, the resulting gain is entirely exempt from taxation — regardless of the amount. There is no capital gains tax on long-term crypto holdings.

This exemption applies to:

Selling crypto for euros or other fiat currencies after 12+ months
Exchanging one cryptocurrency for another after holding the original for 12+ months
Using crypto to purchase goods or services after the holding period has elapsed

The holding period is calculated on a per-unit basis. Each coin or token you acquire starts its own 12-month clock from the date of acquisition. Germany mandates FIFO (First-In, First-Out) as the cost basis method, meaning the oldest units of a given cryptocurrency in your portfolio are deemed sold first. This is critical for determining whether a specific disposal falls within or outside the 1-year window.

Example

If you bought 1 BTC on January 15, 2025 and another 1 BTC on August 1, 2025, then sell 1 BTC on February 1, 2026, FIFO dictates that the January 2025 coin is sold first. Since more than 12 months have passed, that sale is tax-free. If you sell the second BTC on February 1, 2026, only 6 months have passed since its acquisition — that gain is fully taxable.

Mandatory FIFO: No Alternatives Allowed

Unlike the United States, where taxpayers can choose between FIFO and Specific Identification, Germany mandates FIFO as the only permitted cost basis method for private disposal transactions (private Veräußerungsgeschäfte). The Federal Ministry of Finance (BMF) confirmed this position in its comprehensive crypto guidance letter of May 10, 2022 (BMF-Schreiben IV C 1 – S 2256/19/10003 :001).

You cannot use LIFO (Last-In, First-Out), HIFO (Highest-In, First-Out), or Specific Identification in Germany. All crypto disposals must follow FIFO ordering within each individual cryptocurrency. This means separate FIFO queues for BTC, ETH, and every other token — but the oldest units of each specific asset are always sold first.

This mandatory FIFO rule has a direct impact on tax planning. Since you cannot selectively choose which lots to sell, the only way to ensure tax-free disposals is to wait until the oldest lot in your FIFO queue has passed the 12-month threshold.

The €1,000 Freigrenze (Exemption Threshold)

For disposals within the 1-year holding period, Germany provides a Freigrenze of €1,000 per calendar year. This threshold was raised from €600 to €1,000 starting in the 2024 tax year under the Jahressteuergesetz 2022.

Critical distinction: Freigrenze vs. Freibetrag. The €1,000 threshold is a Freigrenze (exemption limit), not a Freibetrag (allowance). This difference has significant consequences:

If your total private disposal gains (Veräußerungsgewinne) for the year are below €1,000, the entire amount is tax-free.
If your total gains reach €1,000 or more, the entire amount is taxable from the first euro — not just the portion above €1,000.

This all-or-nothing mechanism means that crossing the €1,000 threshold by even one euro subjects your full gains to taxation. The Freigrenze applies to the aggregate of all private disposal transactions under §23 EStG, including crypto, real estate sold within the speculation period, and other private sales.

Progressive Tax Rates and Solidaritätszuschlag

Taxable crypto gains (short-term, above the Freigrenze) are added to your other income and taxed at your personal progressive income tax rate. The 2026 German income tax brackets are:

Taxable Income (EUR)	Marginal Rate
Up to €11,784	0% (Grundfreibetrag)
€11,785 – €17,005	14% – 24% (progressive zone 1)
€17,006 – €66,760	24% – 42% (progressive zone 2)
€66,761 – €277,825	42%
Above €277,825	45% (Reichensteuer)

On top of the income tax, a Solidaritätszuschlag (solidarity surcharge) of 5.5% is levied on the income tax amount itself — not on the taxable income. For high earners, this brings the effective maximum rate to approximately 47.475%. Additionally, church tax (Kirchensteuer) of 8% or 9% of income tax may apply depending on your state and religious affiliation.

Comparison note: Italy increased its crypto capital gains tax to 33% effective January 1, 2026 (from 26% previously). Germany's progressive system can result in higher rates for large short-term gains, but the 1-year exemption provides a pathway to 0% that Italy does not offer.

Taxable Events in Germany

The following transactions trigger a taxable event if the asset has been held for less than 12 months:

Selling crypto for fiat currency (EUR, USD, etc.)
Crypto-to-crypto swaps — exchanging BTC for ETH, for example, is a disposal of BTC and an acquisition of ETH
Paying for goods or services with crypto — treated as a disposal at fair market value
Receiving crypto as payment for work — taxable as income (Einkünfte) at the time of receipt, separate from later disposal gains

The following are generally not taxable events:

Buying crypto with fiat currency — no disposal occurs
Transferring crypto between your own wallets — no change in beneficial ownership
Holding crypto — unrealized gains are not taxed
Gifting crypto — no income event for the giver; the recipient inherits the giver's acquisition date and cost basis

Staking, Lending, and DeFi

Staking Rewards

Staking rewards are treated as other income (sonstige Einkünfte) under §22 Nr. 3 EStG at the time they are received. The taxable amount is the fair market value in euros at the moment of receipt. A separate Freigrenze of €256 per year applies to income under §22 Nr. 3 EStG.

Important clarification on holding periods: There was significant uncertainty in the German crypto community about whether staking would extend the holding period from 1 year to 10 years under §23 Abs. 1 Nr. 2 Satz 4 EStG (which extends the period for assets used as a source of income). The BMF resolved this in its May 2022 guidance letter, explicitly confirming that staking does not extend the 1-year holding period to 10 years. Staked tokens retain their original acquisition date, and the standard 12-month Spekulationsfrist applies.

This was a major relief for stakers. Your staked ETH, SOL, or other proof-of-stake tokens are still eligible for the 1-year tax-free exemption under the same rules as any other crypto holding.

Lending and Liquidity Provision

Income from crypto lending (interest received in crypto) is similarly taxed as other income under §22 Nr. 3 EStG at fair market value upon receipt. The BMF also confirmed that lending does not extend the holding period to 10 years.

For DeFi liquidity provision, the tax treatment depends on the specific mechanism. Providing liquidity to an AMM pool may constitute a disposal of the deposited tokens (triggering a potential taxable event) and an acquisition of LP tokens. Withdrawing liquidity is then a disposal of the LP tokens. Impermanent loss is not explicitly addressed in BMF guidance, and taxpayers should document all transactions carefully.

Mining as Commercial Income

Crypto mining is treated as commercial income (Einkünfte aus Gewerbebetrieb) under §15 EStG if conducted with the intent to generate profit. Mined coins are valued at fair market value at the time of creation and subject to income tax plus trade tax (Gewerbesteuer) if the annual trade income exceeds €24,500.

Hobby mining below the commercial threshold may fall under §22 Nr. 3 EStG (other income) with the €256 Freigrenze, but the classification depends on factors such as the scale of operations, equipment investment, and continuity of activity. The distinction matters because commercial miners can deduct business expenses (electricity, hardware, depreciation) against their mining income.

CRS 2.0, CARF, and DAC8: Increased Transparency in 2026

Starting in 2026, German crypto exchanges and service providers must comply with three overlapping reporting frameworks:

CRS 2.0/CARF: The OECD's Crypto-Asset Reporting Framework requires exchanges to report user transaction data to the Bundeszentralamt für Steuern (BZSt), which then shares it with tax authorities in 48+ participating jurisdictions. Germany was among the first wave of CARF adopters.
DAC8: The EU's 8th Directive on Administrative Cooperation, adopted in October 2023, integrates CARF into EU law. All EU member states, including Germany, must transpose DAC8 into domestic legislation. DAC8 mandates automatic exchange of crypto transaction information between EU tax authorities starting January 1, 2026.
Domestic reporting obligations: German exchanges already report under existing BZSt requirements, and the Finanzämter (local tax offices) are increasingly cross-referencing crypto data with individual tax returns.

The practical effect for German taxpayers: assume that your exchange activity is visible to the Finanzamt. Unreported crypto income carries penalties including back taxes, interest (currently 0.5% per month under §233a AO), and potential prosecution for tax evasion (Steuerhinterziehung) under §370 AO, which carries fines or up to 10 years imprisonment in serious cases.

Filing Your Crypto Taxes in Germany

The German tax year follows the calendar year (January 1 – December 31). Individual tax returns (Einkommensteuererklärung) for the 2025 tax year are due by July 31, 2026 for self-filers, or April 30, 2027 if a Steuerberater (tax advisor) files on your behalf.

Crypto gains and losses from private disposals are reported in Anlage SO (Sonstige Einkünfte — other income) of the tax return. You must provide:

Date of acquisition and disposal for each transaction
Purchase and sale prices in euros
Calculated gain or loss per transaction using FIFO
Total net gain for the year

Losses from private disposal transactions can only be offset against gains from private disposal transactions within the same year or carried forward to future years. They cannot be offset against salary, rental income, or other income categories.

How dTax Helps With German Crypto Taxes

dTax applies mandatory FIFO cost basis calculations automatically, tracks your 1-year holding periods across all assets, and identifies which lots have passed the Spekulationsfrist for tax-free treatment. The platform separates staking rewards, mining income, and disposal gains into their correct German tax categories and calculates your Freigrenze status for both §23 and §22 Nr. 3 income.

With support for 23+ exchange CSV formats and on-chain indexing for Ethereum and Solana, dTax consolidates your complete transaction history and generates reports aligned with Anlage SO requirements.

Frequently Asked Questions

Do I need to report crypto if I only held and never sold?

No. Simply holding cryptocurrency does not create a taxable event in Germany. You only need to report disposals (sales, swaps, or payments) that occurred within the 1-year holding period and resulted in gains above the €1,000 Freigrenze. However, staking or lending rewards must be reported as income in the year received if they exceed the €256 Freigrenze under §22 Nr. 3 EStG.

What happens if I sell crypto at a loss within the first year?

Losses from private disposal transactions (Veräußerungsverluste) within the 1-year period can be offset against gains from other private disposal transactions in the same year. If losses exceed gains, the remaining loss can be carried back one year or carried forward indefinitely to offset future private disposal gains. Losses cannot reduce your salary, freelance, or other income.

Is the 1-year holding period calculated per coin or per wallet?

The holding period is calculated per individual unit of cryptocurrency using the FIFO method, regardless of which wallet or exchange holds the asset. If you transfer BTC from Exchange A to a hardware wallet, the acquisition date does not reset. FIFO applies across all your holdings of a given cryptocurrency — not per wallet or per exchange. This means dTax tracks your unified FIFO queue for each token across all connected accounts.