Crypto Taxes in Germany (2026) – English Guide

Germany has some of the most favorable crypto tax rules in the world for long-term holders. This English-language guide explains German crypto tax law, the 1-year exemption, and how to report your gains.

Germany's Favorable Crypto Tax Rules

Germany classifies cryptocurrency as private assets (Privatvermögen) under Section § 23 EStG. The key benefit: if you hold crypto for more than 1 year, all gains are completely tax-free regardless of the amount. This makes Germany one of the most crypto-friendly jurisdictions in the world.

The 1-Year Holding Period Rule

Hold any cryptocurrency for at least 366 days from date of purchase to date of sale, and you pay zero tax on your gains. The holding period starts from the date of acquisition and applies separately to each purchase.

Example: You buy 1 BTC in January 2024 and sell it in February 2025 (13 months later). Your gain is tax-free. If you had sold in December 2024 (11 months), the gain would be taxable.

Tax on Short-Term Gains (Under 1 Year)

Gains from crypto sold within 12 months are taxed as personal income (Einkommensteuer) at your marginal tax rate, which ranges from 14% to 45% plus solidarity surcharge. The good news: there is a €600 annual exemption (Freigrenze) for private sales gains. If your total short-term crypto gains plus other private sales gains stay below €600, they are tax-free.

Important: the €600 is a Freigrenze (threshold), not a Freibetrag (allowance). Exceed €600 by even €1 and the entire gain becomes taxable – not just the excess.

FIFO Method in Germany

Germany uses the FIFO (First In, First Out) method for cost basis. When you sell, the oldest units are treated as sold first. This is applied per exchange or wallet – units on different platforms are tracked separately.

Staking and Mining

Staking rewards and mining income are taxable as other income (sonstige Einkünfte) when received. An important rule: if you receive staking rewards, the holding period for those coins is extended to 10 years (instead of 1 year) before they become tax-free. This controversial rule is based on BMF guidance.

DeFi and Lending

DeFi activities in Germany are complex. Lending your crypto for interest extends the holding period to 10 years. Liquidity pool transactions may trigger taxable disposals. The German tax authority (Bundesfinanzministerium) issued guidance in 2022 addressing many DeFi scenarios.

Filing with Finanzamt

Report crypto gains on Anlage SO (Sonstige Einkünfte / Other Income) of your annual Einkommensteuererklärung. Use crypto tax software to generate a German-format tax report showing all transactions, holding periods, cost basis, and net gains.

Tax Year and Deadline

Germany's tax year runs January 1 to December 31. The filing deadline for the prior year is typically July 31 (or February 28/29 of the following year if using a tax advisor). Late filing can result in late filing fees.

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