Crypto Taxes in Germany (2026) – English Guide

Hold crypto for more than a year in Germany and you pay zero tax on the gains. Zero. It's one of the best deals in the world for long-term investors. But there are nuances – staking, DeFi, and frequent trading all get treated differently. Here's the full picture in English.

Germany's Favorable Crypto Tax Rules

Germany classifies cryptocurrency as private assets (Privatvermögen) under Section § 23 EStG. The headline benefit: hold crypto for more than 1 year and your gains are completely tax-free – no cap on the amount. Sell €1 million in Bitcoin you held for 13 months? Tax-free. That makes Germany one of the best jurisdictions in the world for long-term crypto holders.

The 1-Year Holding Period Rule

Hold any crypto for at least 366 days from date of purchase to date of sale and you pay zero tax on the gain. Each purchase lot has its own separate holding period clock.

Concrete example: You buy 1 BTC in January 2024 and sell in February 2025 – 13 months later. Tax-free. If you'd sold in December 2024 (11 months), you'd owe income tax on the full gain. One day past 12 months changes everything.

Tax on Short-Term Gains (Under 1 Year)

Gains from crypto sold within 12 months are taxed as personal income (Einkommensteuer) at your marginal rate – 14% to 45% plus solidarity surcharge. There's a €600 annual threshold (Freigrenze) for private sales gains. Stay below €600 total and you're tax-free.

Here's the trap: the €600 is a Freigrenze (threshold), not a Freibetrag (allowance). Go €1 over €600 and the entire gain becomes taxable – not just the excess. So if you have €601 in short-term gains, you owe tax on all €601.

FIFO Method in Germany

Germany uses FIFO (First In, First Out) for cost basis. The oldest units you hold are treated as sold first. This applies per exchange or wallet – units on different platforms are tracked separately. Use different wallets and you're managing multiple FIFO stacks.

Staking and Mining

Staking rewards and mining income are taxable as other income (sonstige Einkünfte) when received. Here's the controversial part: the BMF (Federal Finance Ministry) has taken the position that if you receive staking rewards, the holding period for those coins is extended to 10 years before they become tax-free instead of the usual 1 year. This rule is contested but currently official guidance.

DeFi and Lending

Germany's 2022 BMF guidance addressed DeFi directly. Lending crypto for interest extends the holding period to 10 years. Liquidity pool transactions may trigger taxable disposals. If you're doing serious DeFi activity in Germany, the tax implications are complex enough to warrant a Steuerberater (tax advisor) who knows crypto.

Filing with Finanzamt

Report crypto gains on Anlage SO (Sonstige Einkünfte) of your annual Einkommensteuerklärung. Crypto tax software that generates German-format reports will save you hours – Anlage SO requires detailed transaction data including holding periods, cost basis, and net results per asset.

Tax Year and Deadline

Germany's tax year runs January 1 to December 31. The standard filing deadline is July 31 for the prior year (extended to February 28/29 of the following year if you use a tax advisor). File late without a good reason and expect a late filing fee.

Disclaimer: This article is for general informational purposes only and does not constitute tax advice. For individual tax advice, consult a licensed tax professional.