[Deribit] Crypto taxes in Germany – Deribit Insights
If you invest in cryptocurrencies and assets such as Bitcoin and Co. as a private individual, you can trigger a tax liability. The prerequisite for this is that you have your residence in Germany or you live in Germany for more than 180 days per year.
The counterpart to the private investor is the commercial investor. The prerequisite for this is, for example, that investments are made for third parties. The decision whether a person is a private or already commercial investor always leads to discussions, as crypto trustee Georg Brameshuber elaborates:
“In principle, the question arises as to whether a commercial activity is being developed in the overall picture. Real certainty can only be obtained by looking at the individual case. However, both a high number of transactions and high-priced transactions do not necessarily lead to a commercial location.”
When do I have to pay taxes on crypto?
Simply put, you must pay taxes whenever there is a taxation claim. In the case of crypto, this claim exists in special individual and special cases. Specifically, you pay taxes on other income from the sale of private assets or for income from other services.
This means, for example, passive income from staking or lending.
You pay taxes:
If you sell crypto before the end of the one-year holding period (and make a profit of more than €600). Example: if purchased on 01.05.2021, a sale made up to and including 01.05.2022 is taxable. A sale made on or after 02.05.2022 is tax free.
If you earn your income commercially.
In the case of mining, it can be assumed that average miners who cover their costs have a density of operations that suggests a commercial enterprise.
If you get paid in crypto by your employer
If you earn crypto income, this means income from mining, lending, staking, forging, masternodes, margin trading and bounties. For the record, bounties differ from airdrops primarily in that the amount of reward given out for completing a particular achievement is not subject to chance.
Exchange of cryptocurrencies
If you exchange one crypto asset for another (e.g. Solana > USDT), you can trigger a tax liability. The prerequisite for this is that you make a profit over €600 and realize this profit within 365 days from the original purchase.
Trading with Stablecoins
Stablecoins are cryptocurrencies with high price stability (hence the “stable” in the name). Their price is pegged to classic fiat currencies, such as the US dollar (TrueUSD) or the euro (EURB). The sale of stablecoins is only taxable if you trade them within one year (365 days) and thereby make a profit of more than €600.
Margin trading refers to trading with borrowed capital. The external capital is provided by a broker in return for a certain security deposit, the so-called margin. (A margin is basically lower than the provided external capital, note). Traders can use leverage to multiply the margin they deposit and thus speculate on the rise or fall of an underlying crypto asset. The advantage of this is that larger positions can be traded even with little capital.
As a rule, interest also accrues here. The classification as a forward transaction means that income from margin trading is subject to a flat rate of 25 percent capital gains tax. However, the tax-advantaged one-year holding period cannot be applied to capital income.
Trading with Futures
Futures trading does not involve buying or selling crypto assets. Instead, investors speculate on the rise or fall of an asset in the future. Again, the classification as a futures trade comes into play. Accordingly, income from trading in futures is subject to a flat 25 percent capital gains tax rate. Here, too, the tax-advantaged one-year holding period cannot be applied.
Non-fungible Tokens (NFTs)
From a tax perspective, an NFT purchase or sale is a token exchange. This means that the gain is taxable in Germany at the progressive income tax rate and tax-free after a one-year holding period.
When do I not have to pay crypto taxes?
First things first: if you own cryptocurrencies for more than a year that you didn’t receive from capital gains (e.g. margin trading), then selling them privately is always tax-free, no matter how much your profit is. In addition, simply put, there are two scenarios that exempt you from a tax burden:
1. no tax-relevant events are realized. That is, there is simply no profit. (Why a tax return makes sense even in a loss scenario, you will learn a little further down).
2. your profits remain below certain exemption limits (€600)
How much crypto tax do I have to pay?
The crypto tax rate is based on the ordinary individual income tax rate. This is between 14% and 45%. The solidarity surcharge, which everyone must pay, is 5.5% of the tax rate.
Get started with Blockpit
Blockpit is a European provider for crypto tax and compliance services. Their crypto tax app on blockpit.io allows holders of digital assets to make their taxes fast, comfortable and with ease. While the software is functional in all European countries, Blockpit offers certified tax frameworks in Germany, France, Spain, Austria and Switzerland to give users to best possible tax filing: