On March 6, 2025, the German Federal Ministry of Finance (BMF) published an updated letter on the income tax treatment of crypto assets, which replaces the previous letter dated May 10, 2022. Fortunately, the letter does not introduce any burdensome tightening for crypto investors. We summarize the most important aspects.
Sale remains tax-free after one year
First things first: profits from the sale of cryptocurrencies remain tax-free if there is more than one year between purchase and sale. This regulation applies regardless of the amount of the gain and, in particular, even if the crypto assets have been used in the meantime for activities such as staking (provision of coins for block verification) or lending (lending of coins). Germany therefore remains an attractive location for long-term crypto investments.
How do tax offices treat tax reports?
The BMF explicitly mentions the tax reports created by software providers and points out that their completeness depends largely on the underlying data. This indicates that tax offices will no longer accept every tax report without further ado in the future. At the same time, a report that appears plausible may well be used as the basis for the assessment.
Staking rewards – simplification of the inflow
There is a welcome simplification for income from passive staking. The time of “claiming” (active retrieval of the reward by the user) can now be used as the time of receipt of the rewards received. This gives investors the opportunity to take advantage of a favorable exchange rate for collection. However, if no claiming takes place during the year, the rewards are deemed to have been received on December 31 of the year at the latest.
Tax office may estimate crypto income
According to Section 162 of the German Revenue Code (AO), the tax authorities must estimate the basis of taxation if they cannot determine or calculate it themselves. This obligation to estimate applies in particular in cases where taxpayers have provided insufficient information, have not sufficiently explained their information or the tax authority cannot otherwise determine the basis of taxation with sufficient certainty.
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The BMF has now clarified in its letter that an estimate may not be used to penalize taxpayers. This is an important clarification for crypto investors who may not have been able to fully document all transaction data.
Exclusion of NFTs and liquidity mining
The current BMF letter deliberately excludes some areas. For example, non-fungible tokens (NFTs) and liquidity mining are still not covered. However, the BMF has announced that it will successively supplement the letter in close consultation with the tax authorities of the federal states.
Conclusion for wealthy investors
For long-term investors, the key points of the legal situation remain stable. The tax-free sale after a holding period of one year continues to offer attractive structuring options. However, investors should not underestimate the stricter documentation requirements and document their crypto investments carefully in order to avoid unpleasant surprises and high additional tax payments following a tax audit.
Legal and tax advice regarding cryptocurrencies in Germany
Our specialist team of tax advisors and attorneys will support you with all tax and legal issues relating to crypto assets. We help you to understand the complex regulations and to structure your crypto investments in a tax-optimized manner – from the correct recording of your transactions to the preparation of a legally compliant tax return. Feel free to contact us with your questions!
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