Germany’s first nationwide tax guide details that no taxes will be levied on the sale of cryptocurrencies that have been held for a year.
BMF Issues Crypto Tax Guide
On Tuesday, the Federal Ministry of Finance (BMF) of Germany issued a 24-page tax guide document detailing income tax information for cryptocurrencies and other blockchain assets. Besides covering information on crypto-related matters, the tax guide also quoted the Parliamentary State Secretary, Katja Hessel’s statement that the sale of acquired cryptos like BTC or ETH is tax-free for holders who have owned the assets for one year. The tax exemption also applies to other digital assets used in staking or lending protocols.
Crypto Is Key: German Govt.
Six months ago, the German government included crypto and blockchain tech in its coalition agreement, claiming them to be key in the country’s development for the next four year period.
Crypto income taxation has been widely discussed recently, as previously, the time period of holding required to generate tax-free revenue was up to ten years. These guidelines confirm the stipulation of Section 23 of the German Income Tax Act that claims a tax-free revenue if there has been a year’s gap between the acquisition and sale of an asset. Therefore, according to the BMF’s guidelines, the taxation of digital assets will follow the same rules.
Supplementary Document In The Works
The document also contains guidelines regarding mining, staking, and lending digital assets, along with blockchain hard forks and token airdrops. Furthermore, according to Hessel, a supplementary document will be released soon that will further highlight the cooperation between the federal states and the initiatives undertaken by them in this matter.
"Of course, the publication of the guidance is not the end of our engagement with the topic, but an interim result. The rapid development of the 'crypto world' ensures that we do not run out of topics.”
India Not So Crypto-Favorable
Not all countries are welcoming crypto with such open arms. India, for example, has still held on to its conservative approach toward crypto. The central bank of India, the RBI, has already voiced its disapproval of digital assets. On top of that, the Indian government has adopted an opposite viewpoint to that of Germany when it comes to taxing crypto incomes. In the recent Budget 2022 announcement, India’s Finance Minister, Nirmala Sitharaman, detailed a 30% tax on all crypto earnings. In addition to that, she also announced a 1% tax deduction at source for every crypto transaction. Both the taxes have been detrimental to individual crypto traders in the country, many of whom have been forced to move overseas.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.