Germany: cryptocurrencies held for more than a year will no longer be taxed

From now on, Germans will not have to pay taxes on their cryptocurrency income, which has been in the account for more than a year. Thus, the Federal Ministry of Finance issued a document describing the rules for determining and regulating various forms of income in digital assets.

The German government is becoming more open to cryptocurrencies

In early May, the German Federal Ministry of Finance published a document in which it made several recommendations on the regulation of cryptocurrency taxation. In particular, the 24-page document provides a detailed description of tax write-offs, an important part of which is the exemption from income tax in cryptocurrencies that are kept in the account for more than a year. This also applies to stacking and lending. This step towards the development of digital assets indicates a significant interest of the state in this direction.

From now on, cryptocurrency owners living in Germany do not have to wait 10 years to be exempt from taxes on their digital assets. Currently, according to Article 23 of the German Income Tax Act, an amount held in an individual’s account for more than a year is exempt from taxation.

The changes also apply to mining, hard work, and airdrops, the ministry said: “The Federal Ministry of Finance will continue to address income tax issues related to virtual currencies and other tokens, in close coordination with the highest financial authorities of federal states and associations. »

Germany ranks 1st in the propensity for cryptocurrencies

According to crypto aggregator Coincub, Germany has become the most cryptocurrency-friendly country, thus taking the place of Singapore. The country has been able to secure this place due to its position on the use of cryptocurrencies as a means of long-term investment with a special system of taxation. In particular, this procedure for charging taxes in Germany is quite different from the systems of other countries in its focus on the owners of digital assets.

It should also be added that Germany has 1,430 bitcoin nodes, which is 9.08% of the total number of such nodes. Thus, Germany becomes the second country in the number of blockchain nodes after the United States and is ahead of France in this regard, which owns only 3.35% of the total.

In addition, one of Germany’s largest banks, Commerzbank, has announced its intention to provide cryptocurrency services and has already applied for a license. Thus, more than 11 million users of the bank will be able to trade and exchange their digital assets.

Also at the end of 2021, the German interchain decentralized protocol Paycer (PCR) announced its desire to combine DeFi and traditional banking services (TradFi). Paycer made this decision to provide its users with high-interest rates.

Thus, according to the crypto platform KuCoin in March last year, it can be assumed that 44% of Germans are “motivated to invest in cryptocurrencies to become part of the future of finance.” Therefore, Germany, thanks to the great interest of certain institutions and the government in the development of cryptocurrencies, has every chance to become one of the largest players in the digital asset market.

Belgian cryptocurrency service bit4you offers a wide range of tools and services for the successful trading of digital assets. Among the most popular are the constant provision of up-to-date information and news from the market, the necessary trade indicators, and access to the use of about 50 of the most popular tokens. Among other things, the site provides access to its own Academy, thanks to which you can improve your knowledge and skills in cryptocurrency trading. So don’t delay and join the bit4you community.

Marta Krysan, Team bit4you.