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Technology

Germany Affirms Crypto Sold After One Year Is Tax-free (blockworks.co) 40

Posted by msmash from the moving-forward dept.
Crypto investors in Germany won't pay tax on sales of digital assets such as bitcoin and ether -- as long as they're held for more than one year. From a report: Germany's Federal Ministry of Finance shared the ruling in a 24-page document, which formally defined blockchain concepts such as mining, staking, airdrops and masternodes within the context of the country's tax system. The decree marks the first time Germany has issued nationwide tax guidance on cryptocurrency. It was crafted in close consultation with the country's 16 federal states, as well as top financial institutions. Government ministers had held a hearing last summer to gauge sentiment among local crypto associations such as Bitkom and other market participants -- including individual investors. One of the most pressing questions related to whether lending or staking cryptocurrency extends the tax-free period on digital asset sales to 10 years, as is the case with buy-to-let properties.
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Germany Affirms Crypto Sold After One Year Is Tax-free More

Germany Affirms Crypto Sold After One Year Is Tax-free

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  • Cryptos has nothing to do with investing.. (Score:5, Insightful)

    by tekram ( 8023518 ) on Friday May 13, 2022 @01:12PM (#62530126)
    it is speculation, let everyone use the terminology correctly. Investment has underlying instruments that have yield, dividend, income statements, price earnings and bond ratings. Cryptos have none of that which doesn't mean somebody didn't make money off of it, but it was probably not you.

    • Re:Cryptos has nothing to do with investing.. (Score:4, Informative)

      by tekram ( 8023518 ) on Friday May 13, 2022 @01:52PM (#62530266)
      To those who asked about safe investment with no fees that doesn't go bust never has- US Treasury Series I Savings Bonds Inflation Rate Earnings (May - October '22) 9.62% Interest (Annualized for 6 Months) (Limit $10K/Year Per Person).
      • Plus, if you get a physical I bond, it's got Einstein on it!

      • I got them last year when the rate was around 7 or something. This ratchet up is just icing. If you have more than $10k there's a way to invest more--through LLCs, which I thought was shady when I first heard about it, but it looks like it's OK to do with at least one LLC. Also, don't forget spouses and dependents--any valid SSN or tax ID; but surely there mus be limits to this, otherwise somebody would have set up a system to farm $10k deposits out over various entities, and hedgies would be parking fun

    • That isn't entirely true-- miners are invested in cryptocurrency. A few hedging strategies could also be counted as investing. Day trading is obviously not. People holding it like gold are not investing either though, so the regulation is a bit odd to me.

    • Re: (Score:2)

      by kmoser ( 1469707 )
      "Investing" is just a fancy word for "buying something now with the hope you can sell it for more in the future." Whether you're spending money (read: "investing") on cryptocurrency, fiat currency, gold, Rolex watches, rare artwork, stocks, or mutual funds, it's *all* speculation. Some of these instruments are more heavily regulated than others, but at the end of the day it's still caveat emptor.
    • Does gold?

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Friday May 13, 2022 @01:15PM (#62530132)
    Comment removed based on user account deletion

    • Re: (Score:2)

      by fazig ( 2909523 )
      As if Bitcoin would have ever worked as a currency on a larger scale the way it was set up.
      Maybe if we built a Dyson Sphere around the Sun to power the network that can handle all those transactions.

    • Bitcoin is a currency just like Iraqi Dinar. [whnt.com]

      But seriously. Everyone is trading crypto like it's a stock. We were totally uninterested in currency exchange trading, buying and selling USD and EUR and whatever according to daily shifts. But crypto "currency" comes around and now we're all suddenly experts in trading it. It's such horseshit that I weep whenever I see another friend sucked into this growing blackhole of a scam.

      Investment tips: buy real estate, grab all the sweet tax deductions; trade with put a

    • So I'm usually very anti-crypto, but no this isn't a nail in the coffin for crypto. You are also taxed on gains by investing in foriegn currency; say you bought British Pounds for $100 and then converted them back to dollars later and got $120, that 20 is gains. Notably however, currency investing gains are taxed differently, usually 60% of gains can be capital gains and 40% of gains must be income regardless for how long you hold it. That's the most common in Forex markets.

      But, no I would argue this

    • Honestly. Nobody takes BTC seriously as a currency these days, except a few insane Kool-aid drinkers. Even the Bitcoin Maximalists now bill it as a Store of Value(tm).

      Even while promoting LN.

    • This is another nail in the coffin for the idea that Bitcoin et al will one day be a universal currency. If you're taxed for minor fluctuations between you receiving it and you spending it

      Good point! If somebody pays you in Bitcoin you might be liable under tax laws if it fluctuates a bit before you spend it. The Feds will have a field day with that.

      Remember: Al Capone was imprisoned for tax evasion, not for murder, robbery, drug trafficking, racketeering, prostitution, bribery, etc.

  • Why tax it at all? Must the government fucking tax EVERYTHING?

    I don't know about Germany specifically, but government tax money when you make it, they tax money when you use it to buy something. Some of them tax you when you add value to something. Why isn't that enough?

    Sure - you may make some profit buying and selling scam currencies. So fucking what? Why isn't the tax on virtually ALL OTHER forms of income and spending that enough? The profit someone may make on scam currencies doesn't help them much u

    • Must the government fucking tax EVERYTHING?

      Is that a joke? Unless you stop liking civilized society, yes, government must tax all forms of income and capital gains. If the waiter and the builder can pay taxes, so can the crypto bros. WTF makes them special?

    • Governments tax things. That's what they do.

      And the sad thing is that many governments refer to it as "raising revenue", but the reality is taxes are about control. Governments can just print money (or quantitative easing is what it's called in developed economies) to pay for whatever they want, but adding money to the system devalues it (causes inflation, like what the US has right now). Taxes take money out of the economy, cooling it off (as do interest rates).

      If crypto was really worth what it

    • It avoids uncomfortable questions about why anything is taxed. If everything is taxed it must be fair

    • Why tax it at all? Must the government fucking tax EVERYTHING?

      The saying goes: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

      Taxation is a key way for governments to control inflation/deflation. Taxes remove money from circulation, reducing the flow of money in the system cools the economy.

    • If you're taxing that sale, what's the problem?
      It would make such sales expensive for everyone. Not only for the one who got money by an accidental or clever investment.

    • Why isn't the tax on virtually ALL OTHER forms of income and spending that enough?

      Nope.

      Anything that isn't explicitly taxed can be used as a loophole to not pay taxes on other things.

    • Governments need more money. And then more. And then more, and more and more and more GET TO WORK

    • Re: (Score:2)

      by linuxguy ( 98493 )
      > Must the government fucking tax EVERYTHING?

      Others have already pointed it out but it is worth repeating. *All income* above a certain threshold must be taxed or otherwise the system becomes unfair. If the govt. said that crypto gains are not taxed at all, then they would have created a loophole that certain segment of society will take advantage of.

      Don't ask the govt. to create special exceptions from taxations. Instead, ask that they reduce spending. And good luck with that. Both politica
  • In the rest of the world it's not free, and is declared as a capital loss after one year. So Germans don't get that benefit.

    • I RTFA but I didn't see where it said anything about not being taxed as capital gains! It just looked like it was related to lending crypto and how that extends some kind of tax liability window.

      I can't actually imagine an EU country not taxing a trade as capital gains (short- or long-term, doesn't matter).

      Can someone else provide some illumination / clarification?

      • No idea what you mean with "capital gains".

        If you buy something on a stock market, and hold it longer than a year before selling it: it is tax free.

        And the "new ruling" confirms that the same is true for "crypto currencies".

  • They'll do anything to sucker you into "crypto".

  • Here if you HODL for more than a year, all you get for your trouble is a reduced capital gains rate. Plus if you score more than $250k you owe the ACA 3.8% tax which is not reduced.

  • Anyone can issue their own crypto currency. Now imagine employees of a company getting paid minimum wage, plus their company's own crypto tokens which they buy from you a year later at a previously agreed upon fixed price - essentially like a bond, but a way for tax free earnings!

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