Germany issued new tax-free guidelines for crypto holders

Germany issued new tax-free guidelines for crypto holders
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ECONOMY

Germany issued new tax-free guidelines for crypto holders

Germany released new income tax guidelines for cryptocurrency holders, according to the release.

05/13/2022

Germany issued new income tax-free guidelines for crypto holders

Germany’s Federal Ministry of Finance released nationwide instructions on tax for crypto mining, staking, lending, hard forks, and airdrops. 

The announcement highlighted ‘the tax-free rule on gains’ that only applies if the individuals sell cryptocurrency after holding it for more than a year. 

Germany’s Favorable Income Tax

German taxpayers may view the 24-page income tax rules as beneficial as it provides direct outlines for buying, selling, and trading of cryptocurrency and digital assets.                                            

A report highlighted the Germany Income-Tax Act Section 23. It says, “the windfall of any asset sold after a year since its acquisition is tax-free.” 

Katja Hessel, Parliamentary State Secretary, stated that the tax-free guidelines remain applicable if bitcoin (BTC) or ether (ETH) has been lent to someone or staked to create new crypto blocks for an over 12-month period.

Moreover, the finance minister of Germany noted “a 2018 court judgment” which stated redeeming the tokens does not count as a sale under income tax law.                

 

Utility token is a crypto asset that provides specific rights like getting certain products and services. So, it means redeeming utility tokens is still not applicable as income tax. 

The 10-year holding period exempts individuals from tax which applies “to non-mobile assets” like land yet not on cryptocurrency.    

As for crypto miners, the guidelines pointed out that “the newly minted BTC will have waived tax payments after 12 months of holding.” 

Still, Hessel mentioned that the Federal Ministry of Finance would release additional instructions on using and trading cryptocurrency. 

By Marielle Petere Wozinga Staff

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