Tax liability for cryptocurrencies
Tax liability for cryptocurrencies
Not least because of the reports of high price gains (and losses), cryptocurrencies have become an issue for many investors. But the financial administration is also interested, because trading in cryptocurrencies is often tax-relevant.
Is trading in cryptocurrencies taxable?
For tax treatment, it is important whether the cryptocurrencies are traded commercially or privately. Business trading in cryptocurrencies is always subject to either income tax or corporation tax, depending on the legal form of the company. Private trading in cryptocurrencies, on the other hand, is generally only subject to income tax until the one-year speculation period has expired.
How and in what amount is taxed?
Private trading in cryptocurrencies is taxed as a speculative business if the purchase and sale take place within the one-year speculation period. In this case, the capital gains are added to the taxable income and taxed at the progressive income tax rate (with a top tax rate of up to 55%).
On the other hand, price gains made in private trading in cryptocurrencies are generally tax-free if the acquisition was more than a year ago at the time of sale or if the total income from speculative transactions during a calendar year is less than € 440.00.
Income from corporate trading in cryptocurrencies is taxed along with the company's profits. The progressive income tax rate (with a top tax rate of up to 55%) is applied to sole proprietorships and partnerships, while corporation tax of 25% is due for corporations and a distribution of profits to natural persons is taxed again at 27.5%.
In certain constellations, taxpayers who are not subject to corporation tax may also incur capital gains tax of 27.5%. This is the case, for example, with interest-bearing cryptocurrencies or with crypto assets that are designed like shares or profit participation rights (so-called "security tokens").
Exchange rate gains from trading in cryptocurrencies are not automatically reported to the tax authorities, but must be stated in the assessment. If taxable income is not stated, there is a risk of penalties!
As of February 8, 2021
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