Bitcoin and Ethereum will be Tax-Free in Germany after one year of possession. Yes, you heard right, Germany’s federal finance ministry (BMF) issued Germany’s first guidance on the income tax treatment of virtual currencies as well as other blockchain-based crypto tokens.
Crypto users can sell their Cryptocurrencies without paying any tax to the government after one year of possession even if they use them for staking.
Germany’s federal finance ministry (BMF) issued a 24-page document on Tuesday that covers various aspects of crypto-related issues according to Germany’s income tax law.
Parliamentary State Secretary Katja Hessel said in a statement that the sale of acquired cryptocurrencies like Bitcoin or Ethereum is now tax-free for individuals in Germany after one year of owning the assets. This new law will be also applicable to virtual assets used for lending and staking purposes.
Before this new law, the cryptocurrencies used for staking or lending to generate profits may have to hold up to 10 years for receiving income tax exemption benefits from the German government. But now Germany’s federal finance ministry (BMF) has changed this rule.
This new guidance has been released by the income tax department for virtual assets after six months of the new German government when they included cryptocurrencies and blockchain technology in their coalition agreement. This new law has been passed focusing on the country’s development in the next few years.
Katja Hessel also said, “Of course, the publication of the guidance is not the end of our engagement with the topic, but an interim result”. According to him, the German government is working on this topic for more improvements to keep the country’s development as a priority.