Do cryptocurrency traders in Germany pay tax?

Claud Mccoid

First of all, a cryptocurrency or simply “crypto” is a digital currency that can be used to buy goods and services, with an application of an online ledger with strong cryptography to secure online transactions. The market is controlled by speculators who determine the upward or the downward position of the price at any given point. The most popular cryptocurrency is bitcoin and it’s accepted globally.

When you want to invest in cryptocurrency, you might have to use the services of financial companies. However, you will need to read about German finance companies on You will get to know the financial platforms that other cryptocurrency traders in Germany are using, the ones that they have stated makes it easy for them to be able to trade the currency and the financial companies that don’t trade or make it difficult. From their experience, you will know the best company to use to trade your cryptocurrency.

In Germany, it’s legal and accepted among citizens for various online transactions but do the traders pay tax in the country? This is as opposed to countries like China and India that is discouraging their citizens from trading the currency.

There’s no fixed law to the issue of tax payment by crypto traders. This is due to some government policies. In one case, there’s a law that mandates payment of tax by the traders and on the other hand, certain conditions attached negates the payment of tax. For example, a trader who buys crypto is mandated by law to pay tax but upon which he holds the crypto for up to one year or more, he’s no longer mandated to pay tax for the same crypto.

As opposed to most developed countries, Germany doesn’t see cryptos as currencies, commodities, or stocks. Instead, Bitcoin and altcoins are considered private money. This distinction is important since private sales bring tax benefits in Germany.

According to rule 23 EStG, private sales that do not exceed 600 euros are tax exempted. But perhaps even more interesting is the fact that you pay no tax if you hold your Bitcoin, Litecoin, Ethereum, Ripple, or other altcoins, for over one year and above. No matter how much you make selling your cryptocurrencies, you don’t pay tax on the capital gains if you’ve held them for over one year.

Practical illustration

If on 1st of January 2019, a trader bought 1 BTC for $1,000. If the trader sold it on December 15th same year may be to enjoy a little Christmas bonus worth $17,000, the trader would have to pay capital gains tax over the $16,000 profit. If, however, the trader had held the Bitcoin past 1 January 2020, all capital gains tax would be waived. This is the actual situation regarding the payment of tax by cryptocurrency operators in Germany.

Lastly, if you are a German resident and consider venturing into crypto trading, do more research and find out more about how the country relates to the issue of cryptocurrency.

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