How Much Tax on Crypto Gains in Germany?
The most common German crypto misconception is that gains are taxed at the flat 25% Abgeltungsteuer that applies to investment income. They are not, and the difference runs in both directions: the rate can be higher, and it can also be zero.
The rate
The BMF classifies cryptocurrencies as private assets. Gains on disposal are a private disposal transaction under section 23 of the Income Tax Act, taxed at your personal income tax rate of 0 to 45%. That means the rate depends on your total income for the year rather than on the asset.
So there is no single answer to "how much". A high earner disposing within the holding period faces a materially higher rate than a low earner doing the same thing, which is the opposite of how a flat withholding tax behaves.
The one-year rule is the biggest lever in the system
Hold for more than twelve months and the gain is tax free, regardless of the amount. Twelve months or less and it is taxed at your income tax rate.
This is unusually generous by European standards and it makes the holding period the single most important thing to know before you dispose of anything. It also means the answer to "how much tax" is frequently "none", provided you can evidence the acquisition date of the specific units disposed of.
Two clarifications from the BMF are worth knowing. Staking or lending does not extend the one-year holding period to ten years, so coins held for more than a year remain tax free on disposal even if they were staked. And the March 2025 BMF letter expects wallet level documentation with timestamps for each reward, which raises the evidentiary bar considerably.
The 1,000 euro Freigrenze, and the word that matters
If your total gains from private disposal transactions for the year stay below 1,000 euros, they are tax free.
The critical detail is in the German term. This is a Freigrenze, an exemption limit, not a Freibetrag, an allowance. Exceed it and the entire gain becomes taxable, not just the part above 1,000 euros. A gain of 999 euros is tax free; a gain of 1,001 euros is fully taxable. There is no other threshold in ordinary German taxation that behaves quite so unforgivingly, and it is the single most valuable planning fact on this page.
Crypto income is separate. Staking, lending, mining and airdrops are generally taxed as other income under section 22 no. 3 of the Income Tax Act at their euro value on receipt, with a separate and much smaller 256 euro Freigrenze per year, which behaves the same way. Verify current figures with the BMF or your Finanzamt.
Cost basis
Germany uses FIFO for private disposal transactions. That matters directly for the holding period: FIFO means the units you are treated as disposing of are the oldest ones, which is usually favourable, since they are the ones most likely to be past twelve months.
Working the calculation
- Identify each disposal within the year: sale for euros, swap of one coin for another, or spending it.
- Apply FIFO to find which units were disposed of and their acquisition dates.
- Drop everything held more than twelve months. Those gains are tax free.
- Total the remaining gains. Under 1,000 euros in aggregate, tax free. Over, the entire amount is taxable.
- Add that to your other income and apply your personal rate.
- Handle staking and similar income separately under section 22 with its own 256 euro limit.
Filing
Crypto goes in your annual income tax return through ELSTER, on Anlage SO for private disposals and section 22 income. If your activity is commercial, profits belong on Anlage G or Anlage S instead, with deductible business expenses. The tax year is the calendar year and self filing is due by 31 July of the following year, later if a Steuerberater files for you.
Our crypto tax calculator applies FIFO and the holding period per lot, and German crypto tax covers the framework.
General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.
FAQ
No. The BMF classifies crypto as private assets, and gains on disposal are a private disposal transaction under section 23 of the Income Tax Act taxed at your personal income tax rate of 0 to 45%, not at the flat withholding rate for investment income.
Hold for more than twelve months and the gain is tax free regardless of amount. The BMF has also clarified that staking or lending does not extend the one-year holding period to ten years.
If total gains from private disposal transactions for the year stay below 1,000 euros they are tax free. It is an exemption limit rather than an allowance, so exceeding it makes the entire gain taxable, not only the part above 1,000 euros.
Separately from disposals, generally as other income under section 22 no. 3 of the Income Tax Act at the euro value on receipt, with its own much smaller 256 euro Freigrenze per year that behaves the same all or nothing way.