The German federal ministry of finance (BMF) provided the nation’s first guidance on the income tax treatment of cryptocurrencies and other blockchain-based tokens.
The 24-page paper published on Tuesday explains crypto-related concerns from a technical perspective and classifies them according to German income tax legislation.
The sale, lending and staking of acquired cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are all now tax-free for individuals owning these coins in at least one year, according to a statement by Parliamentary State Secretary Katja Hessel.
Previously, cryptocurrencies used for staking or otherwise to create a profit were required to be kept for ten years to qualify for a tax exemption. According to the BMF, this is no longer true.
Rapid development
The newly released guidance also addresses mining, staking, lending, hard forks, token airdrops, and cryptocurrencies’ buying and selling.
Hessel said that the publication of the guidance is not the end of their involvement with the subject but rather an intermediate outcome. The fast evolution of the crypto world guarantees that there are always discussion subjects.
The German government is already working on supplemental documents that focus on federal-state collaboration and their commitments to the subject.
The guidance on the income tax treatment of virtual assets was published six months after the new German government included cryptocurrencies and blockchain technology in its coalition agreement, portraying them as the pillars of the nation’s growth over the next four years.
