Germany’s Federal Ministry of Finance (BMF), alongside the country’s highest tax authorities, recently published a letter on how income from cryptocurrencies and other digital assets would be taxed in the country.
BMF: No Tax on BTC and ETH Held Over a Year
According to the BMF, individuals who sell their bitcoin (BTC) and ether (ETH) after a year will not pay tax on them. The letter also covered topics such as trading, cryptocurrency staking, mining, lending, hardforks, and airdrops.
The guide also confirms that the tax-free benefit applies to crypto assets that are staked or loaned for at least a year. This includes digital assets that have been delegated to validators to process transactions, staked in pools to receive rewards, or given to a third party to trade.
The letter also highlights that income taxes do not apply to utility tokens associated with a particular network or product. Users can redeem these tokens without attracting taxes.
However, Parliamentary State Secretary Katja Hessel noted that crypto users are not allowed to apply for the alternate 10-year holding period which applies to non-digital assets like land.
Hessel further stated that more guidelines on crypto taxation will be published in the future considering the fast-growing nature of the crypto market.
“Of course, the forthcoming official publication of the BMF letter is not the end of our discussion of the subject, but an interim result. The rapid development of the ‘crypto world’ ensures that we do not run out of topics. A supplementary letter on the obligations to cooperate and record is already in progress.”
Countries Imposing Crypto Taxes
On April 1, India imposed a 30% tax on all crypto incomes. Traders and investors are expected to comply with tax regulators or face the consequences. Shortly after, the body regulating goods and services tax (GST) in India, announced plans to treat cryptocurrencies like casinos and online betting in an effort to implement a 28% GST on crypto transactions.
In April, Coinfomania reported that Indonesia’s new crypto tax law, which went into effect on May 1, will see traders pay 0.1% as income tax and value-added tax (VAT).