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- Germany’s Finance Ministry has published new guidelines for crypto taxation, the first comprehensive regulations tackling lending, staking, mining, trading and more.
- Among the most impactful is that the government will not tax Bitcoin gains made if the crypto is held for at least one year.
Germany has published its first comprehensive guidance on taxing the burgeoning cryptocurrency industry. One of the stipulations is that the country will not be taxing Bitcoin gains if the crypto is held for at least a year.
The German Ministry of Finance (BMF) consulted the highest tax authorities of the federal states before publishing the guidelines, the ministry said in its press release. It intends to provide guidance to regulators, crypto companies, and ordinary traders.
The guidelines delve into all things crypto, making them among the most comprehensive in the world to date. They deal with block creation, or mining as it’s known in Bitcoin, as well as “staking, lending, hard forks, airdrops , the special features of utility and security tokens under income tax law, and tokens as employee income.”
In what could be the most impactful guideline, Parliamentary State Secretary Katja Hessel remarked:
For private individuals, the sale of purchased Bitcoin and Ether is tax-free after one year. The deadline is not extended to ten years if, for example, bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else to create their block.
Previously, the proposal was for the tax-free holding period to be 10 years.
— Frank Schäffler (@f_schaeffler) April 29, 2022
The Ministry also pledged to continue working on crypto regulations and to improve on the guidelines.
“Of course, the forthcoming official publication of the BMF letter is not the end of our discussion of the subject, but an interim result. The rapid development of the ‘crypto world’ ensures that we do not run out of topics. A supplementary letter on the obligations to cooperate and record is already in progress,” Hessel added.
The tax guidelines are the latest move by Germany to make the country a European crypto hub. For one, gains made from the sale of crypto under $620 are tax-exempt. In addition, the country has officially said it will regard Bitcoin as a currency in regard to tax decisions.
An official document stated:
Virtual currencies become the equivalent to legal means of payment, insofar as these so-called virtual currencies of those involved in the transaction as an alternative contractual and immediate means of payment have been accepted.