German Crypto Tax Guide 2025: Latest BZSt Updates

Some crypto activities are tax-exempt. These activities include:

💳  Buying crypto with EUR.

🔁  Transferring crypto between your own wallets.

🔒  Holding crypto.

💸  Long-term capital gains from crypto or short-term capital gains under €1000 annually (but if you earn over this amount, all your short-term capital gains are taxable). 

💰  Earning less than €256 in additional income from crypto annually (but if you earn over this amount, all your additional income is taxable). 

🎁  Gifting crypto to family & friends (provided you’re not over your tax free allowance per person).

♥️  Donating crypto to charity.

🪂  Airdrops - provided you did nothing in return.

Crypto is classed as a private asset in Germany and, as such, is subject to Income Tax - but only in specific circumstances. It all comes down to how long you’ve held your asset and the specific transaction.

You’ll have a capital gain or loss when you dispose of your crypto - but in Germany, only short-term capital gains from crypto are taxable, while long-term capital gains are tax free. 

You’ll pay Income Tax on any short-term capital gains at up to 45% (plus potentially a 5.5% Solidarity Tax). There is, however, an annual tax free allowance of €1000 for short-term capital gains. Anything under this figure annually, you do not need to report or pay tax on. If you go over this figure, however, then all of it is taxable.

Short-term capital losses from crypto may be offset against capital gains to reduce your tax liability.

Disposals of crypto include:

🏡  Selling crypto for EUR or another fiat currency.

🤝🏽  Trading one crypto for another, including NFTs, stablecoins, and other tokens.

🧸  Spending crypto to pay for goods or services.

Other crypto transactions may result in additional income. This includes:

💰  Getting paid in crypto
⛏️  Mining rewards
🏦  Staking rewards
💸  Referral bonuses
🪂  Airdrops - if you did something in return.

As well as this, there are a number of DeFi activities that may be subject to Income Tax - it’ll all depend on whether you’re earning new tokens or how long you’ve held your asset if you’re trading crypto. It’s advisable to speak to an experienced crypto accountant if you have DeFi transactions, as the BZSt has no guidance. 

You can see the latest BZSt Income Tax rates here.

First, you need to determine your cost basis. This includes the amount you paid for your crypto plus any applicable fees, such as purchase or sale fees. For instance, if you bought 1 ETH for €1500 and paid a €50 purchase fee, your total cost basis for that ETH would be €1550.

For crypto acquired through other means without a clear purchase cost, the cost basis is the fair market value of the asset in EUR on the day you received it.

Most investors aren’t transacting with individual crypto assets like in our previous example. Instead, they’re trading using multiple platforms and multiple assets of the same kind. Let’s say you bought 3 ETH throughout the year, all at different price points, how do you know which cost base you use to calculate your gain or loss?

This is where a cost basis method factors in, and the BZSt has clear guidance stating that wherever possible units should be specifically identified. However, if this is not possible, investors should use the FIFO (First In, First Out) accounting method. This method dictates that the first asset you acquired is the first asset you disposed.

Once you’ve determined your cost basis, subtract this amount from your sale price to calculate your gain or loss from the transaction.

If you disposed of crypto by trading or spending it, use the fair market value of your crypto in EUR on the day you disposed of it as your sale price.

If you have a short-term capital gain, you’ll be liable for Income Tax on that amount. If you have a short-term capital loss, you can offset it against your taxable gains to reduce your tax liability.

If you don’t have any taxable gains to offset losses against, you can carry these losses forward to offset against future gains—but you’ll need to report these in your tax return in order to do so.

The BZSt is clear that you may be able to claim a capital loss for lost or stolen crypto, but only if you provide evidence. This includes the wallet address and proof of ownership, the dates when you acquired and lost the key, the cost of acquiring the lost cryptocurrency, confirmation that you controlled the wallet, the amount of cryptocurrency lost at the time, proof that you possess the hardware where the wallet is stored, and transaction records linking the wallet to your identity through an exchange.

Once you’ve calculated your taxable short-term gains, losses, and income - you need to report this to BZSt in your annual tax return. You can do this online with the Elster portal or with paper forms:

• Hauptvordruck ESt 1 A (General Tax Form)
• Anlage SO (for other income)

Keeping track of your cost basis in line with BZSt guidelines, calculating gains and losses, and determining the fair market value of any crypto income can be challenging for active investors. That’s why many choose to use a crypto tax calculator like Koinly to simplify the process.

With Koinly, you can either connect to Kraken via SSO (OAuth) for automatic data import or export your account history from Kraken as a CSV file and upload it manually.

Once Koinly has your transaction data, it will determine your cost basis, calculate your gains, losses, and income, and generate your crypto tax reports for easy filing.

You can’t legally avoid tax on your crypto without facing penalties from BZSt, but you can reduce your tax bill by:

💎  Hodling for a year for tax free long-term capital gains.
♥️  Utilise the €1000 and €256 exemption limits (but remember if you go over these figures, the entire amount is taxable).
🔍  Track and harvest your unrealized short-term losses to identify opportunities to harvest these losses (Koinly has a tax optimization tool to help you do this!)

Agora que você entende como seus investimentos em ativos digitais são tributados, por que não continuar sua jornada de cripto conferindo nosso Centro de aprendizagem.