Germany decided not to tax BTC and ETH that are sold after being in possession for a year even if they are used for staking so let’s have a closer look at today’s latest cryptocurrency news.
Cryptocurrencies can be sold tax-free after a year of possession even If they are used for staking, according to the federal finance ministry and the guidance on the income tax treatment of crypto as Germany decided. Most importantly, the sale of the acquired cryptocurrencies like BTC and ETH is now tax-free for users after one year of owning the asset as the Parliamentary state secretary Katja Hessel added. The new guidance applies to digital assets used in staking or lending protocols.
The latter was one of the most discussed questions in recent months as Section 23 of the German Income Tax stipulated that if the period between the acquisition and the sale of the asset is mroe than a year, the full amount of the gains are tax-free. The cryptocurrencies used for staking or otherwise generating a profit might have to be held for up to 10 years to receive a tax exemption but that’s no longer the case as per the BMF. The cryptocurrencies used for staking or to generate profit could be held for up to 10 years and receive tax exemption but in addition to buying and selling crypto, the new guidance deals with mining, lending, hard forks, and staking but also token airdrops. Hessel added:
“Of course, the publication of the guidance is not the end of our engagement with the topic, but an interim result. The rapid development of the ‘crypto world’ ensures that we do not run out of topics.”
According to Hessel, the German government is working on a supplementary document that focuses on the cooperation between the federal states and the commitments to the issue. The publication of the guidance on the income tax treatment of the virtual assets came six months after the new German government included crypto and blockchain in the coaliting agreement and described them as the key element that will support the country’s development in the next four years.