Bitcoin and Taxes in Germany: Holding Period, Savings Plan, ETP and Mining

Gains from selling Bitcoin are tax-free in Germany when more than twelve months lie between purchase and sale. Sell earlier and you tax the gain at your personal income tax rate of up to 45 percent plus the solidarity surcharge. An exemption threshold of 1,000 euros a year stays tax-free. So much for the rule. In practice most people come unstuck not on the rule itself but on the cases it does not cover: a savings plan with twelve different deadlines, a Bitcoin ETP taxed under different rules, or the transfer from an exchange into your own wallet. This article works through the Bitcoin-specific cases. The general basics covering all cryptocurrencies are in our guide to crypto tax in Germany. The Basic Rule for Bitcoin in Two Sentences For tax purposes Bitcoin is not a security but an "other economic good". Its sale out of private assets is a private disposal under Section 23 of the German Income Tax Act, and there the holding period decides the tax. The Federal Fiscal Court confirmed this by ruling of February 14, 2023 (case number IX R 3/22). From that follows the difference from a share: anyone selling shares always pays 25 percent flat withholding tax, no matter how long they ha...