Crypto Taxes in Germany Explained: The One-Year Rule and More

This article contains affiliate links.

Germany is one of the few EU countries where crypto held privately can become completely tax-free. The key rule: if you sell or swap crypto more than one year after you bought it, the gain is not taxed. Sell within a year and the gain counts as a private sale transaction, taxed at your personal income tax rate, unless your total gains from such sales stay below €1,000 in the calendar year.

That is the core of crypto tax in Germany, and for now it still applies. A draft bill published on 30 September 2026 would end the one-year exemption for crypto bought from 2027; we explain the plan and its status below. The details, such as swaps, staking rewards and how the holding period is counted, are where people slip up. This guide is based on the Federal Ministry of Finance’s (BMF) letter on crypto-assets of 6 March 2025, which the tax offices apply nationwide.

General information, not tax advice. For your own situation, check with your Finanzamt or a Steuerberater.

Private sale transactions: the one-year rule

Crypto-assets held as private assets are “other assets” under § 23 of the German Income Tax Act (EStG). The Federal Fiscal Court confirmed this in a judgment of 14 February 2023 (IX R 3/22). That has two consequences:

1. Within one year: a sale is a private sale transaction (“privates Veräußerungsgeschäft”). The gain, meaning the sale price minus acquisition costs and transaction costs, is taxable.
2. After more than one year: the gain is tax-free. It does not matter how large it is.

The holding period starts when you acquire the coin and ends when you dispose of it. Intention does not matter: selling within the period is taxable even if you never meant to trade.

What counts as a disposal?

• Selling crypto for euros or another fiat currency;
• Swapping one crypto-asset for another, for example bitcoin for ether. Each swap is a disposal of the coin you give away and an acquisition of the one you receive, which starts a new one-year period;
• Paying for goods or services with crypto.

Moving crypto between your own wallets and exchanges is not a disposal.

The €1,000 exemption limit

Since the 2024 tax year, gains from all private sale transactions in a calendar year remain tax-free if their total is less than €1,000. Before that the limit was €600.

It is an exemption limit (“Freigrenze”), not an allowance. If your total reaches €1,000, the whole amount becomes taxable, not just the part above it. And the limit covers all private sale transactions together, so gains from selling gold or other assets within their holding period count towards it too. Losses from private sale transactions can be offset against gains from the same category.

Which coins did you sell? FIFO

If you bought the same coin at different times, you need to know which units you sold to check the holding period. The BMF letter accepts the first-in, first-out (FIFO) method: the units you bought first are treated as sold first. The method is applied per wallet or account, which is one more reason to keep clean records of every platform you use.

FIFO in practice: a hypothetical example

Ben buys 0.05 BTC for €2,500 in February 2025 and another 0.05 BTC for €4,000 in September 2025, both on the same exchange. In January 2026 he sells 0.05 BTC there for €4,500.

• Both lots still on the exchange: FIFO treats the February 2025 coins as sold. They were held for less than a year, so the gain of €2,000 is taxable.
• February lot moved to his own hardware wallet earlier: the exchange wallet now holds only the September lot, so that is what he sold. The gain is €500, still within one year, but below the €1,000 limit if he has no other private sale gains that year.
• He waits until March 2026 instead: FIFO picks the February 2025 lot, now held for more than a year. The gain is tax-free, whatever its size.

The figures are made up. The point is that where coins sit and when you sell can change the result.

Staking, lending and other income

Not every crypto receipt is a purchase. Rewards are taxed differently.

Staking rewards

According to the BMF letter, income from passive staking, such as joining a staking pool or staking through a platform, is generally taxable as other income under § 22 no. 3 EStG when you receive it, valued at the market price at that time. For simplicity, the tax office accepts the moment the rewards arrive in your wallet as the time of receipt.

Income in this category is tax-free if your total for the year is less than €256. That is again an exemption limit: reach €256 and all of it is taxable.

Staking does not extend the holding period of the staked coins to ten years; that question was settled years ago. The coins you receive as rewards start their own one-year period from the moment you receive them. If you are new to staking, our explainer on how crypto staking works and what can go wrong covers the basics.

Lending

Interest-like income from lending crypto is also generally treated as other income under § 22 no. 3 EStG.

Airdrops and forks

Airdrops may be taxable as other income or as an acquisition, depending on whether you did something in return. Hard forks follow their own rules.

When it becomes a business

Frequent, large-scale trading can be treated as a commercial activity rather than private asset management. The BMF letter refers to the criteria used for securities and foreign exchange trading. If crypto activity is a large part of your income, get advice, because business income follows different rules.

Planned reform: what may change from 2027

On 30 September 2026 the Federal Ministry of Finance published a draft bill to reform the taxation of crypto held privately. In its current form:

• Exchange-type crypto-assets such as bitcoin and ether acquired after 31 December 2026 would be taxed like income from shares: a flat 25% plus solidarity surcharge (about 26.4%, plus church tax where it applies), however long you hold them.
• Crypto acquired up to and including 31 December 2026 would stay under the current rules, including the one-year exemption.
• From 2028, crypto service providers would withhold the tax for these new holdings.
• If a provider cannot document when coins were acquired, the draft would assume they were bought after the cut-off date.

Status: this is a draft only. The cabinet decision expected on 14 October 2026 did not happen, and the Bundestag and Bundesrat would still have to pass a law. The details can change. Until then, the rules in this guide apply.

What it means in practice: purchase dates become even more important. Keep proof of when you bought each coin before 2027, such as exchange exports and wallet records. Do not buy or sell just because of a draft; if large amounts are involved, ask a Steuerberater.

The German system: honest pros and cons

Pros:

• Gains on crypto held for more than a year are currently tax-free, whatever their size.
• Small short-term gains below €1,000 a year stay tax-free.
• Short-term losses can be offset against short-term gains in the same category.

Cons:

• Both limits are cliffs: €999 of gains is tax-free, €1,000 is fully taxable.
• Every swap restarts the one-year clock, which catches out active users.
• Short-term gains are taxed at up to 45%, more than the flat 25% on shares.
• Record-keeping per wallet is demanding, and the planned reform would end the one-year exemption for new purchases.

How to declare crypto in your German tax return

Taxable crypto gains and income go into Anlage SO (other income) of your income tax return:

• Private sale transactions under § 23 EStG in the section for private sales;
• Staking, lending and similar income under § 22 no. 3 EStG in the section for other services.

The tax rate is your personal income tax rate, between 14% and 45%, plus solidarity surcharge and church tax where they apply. There is no flat tax for privately held crypto, unlike for shares.

Documentation is your responsibility

The 2025 BMF letter puts particular weight on record-keeping and the taxpayer’s duty to cooperate. You need to be able to show when you bought each coin, at what price, and when and how you disposed of it. Exchange exports, wallet addresses and transaction IDs are your evidence. From 2026, EU providers also report customer data to tax authorities under DAC8, so the Finanzamt can increasingly compare your return with what exchanges report.

A worked example

Anna, living in Germany, buys 0.1 BTC for €5,000 in March 2025.

• Scenario 1: she sells it in May 2026 for €7,000. More than a year has passed, so the €2,000 gain is tax-free.
• Scenario 2: she sells it in December 2025 for €5,800. The €800 gain is within one year. If she has no other private sale gains that year, her total stays below €1,000 and nothing is taxed.
• Scenario 3: as scenario 2, but she also swapped some ETH within a year, with a €300 gain. Her total private sale gains are now €1,100, and the whole €1,100 is taxable at her personal rate. At a hypothetical marginal rate of 30%, that is about €330 of income tax, plus church tax where it applies.
• Scenario 4: in 2026 she also receives staking rewards worth €240 in total on the days she received them. That is below €256, so they are tax-free. Had they been worth €260, all €260 would be taxable as other income: about €78 at the same 30% rate.

These figures are made up to show the mechanics. They say nothing about future prices.

Where crypto tax software helps

A spreadsheet can work for a handful of trades. With swaps, several wallets or staking, FIFO per wallet quickly becomes a chore. Crypto tax software imports your history, applies German rules and produces figures you can transfer to Anlage SO. Divly offers a Germany-specific report with guidance for Anlage SO; Koinly supports German tax rules and many exchanges. Our comparison of crypto tax software for EU users goes into the differences.

Quick checklist

• Note the purchase date and price of every coin, per wallet.
• Treat every swap as a sale plus a new purchase.
• Keep staking and other rewards separate, with their value on the day you received them.
• Add up all private sale gains for the year before checking the €1,000 limit.
• Keep exports and statements for every platform you used, also ones you have closed.

Sources: BMF letter “Einzelfragen zur ertragsteuerrechtlichen Behandlung bestimmter Kryptowerte” of 6 March 2025 (and its English courtesy translation); Federal Fiscal Court judgment IX R 3/22; Finanzämter NRW and Ministry of Finance Baden-Württemberg information pages; BMF draft bill on the reform of the taxation of crypto-assets in private assets (Referentenentwurf, 30 September 2026); Divly Germany report information (checked October 2026). Information as of November 2026. Not tax advice.