Germany outlines favorable tax guidelines, gains on BTC and ETH sold after a year tax-free

cointelegraph.com:

The Federal Ministry of Finance (BaFin) published a 24-page document on Tuesday outlining clear income tax rules for cryptocurrency and virtual assets. Tax practitioners, businesses and individual taxpayers now have clear direction on the tax requirements for acquiring, trading and selling cryptocurrencies.

The key takeaway is that individuals who sell BTC or ETH more than 12 months after acquisition will not be liable for taxes on the sale if they realize a profit. Parliamentary State Secretary Katja Hessel also addressed questions around the long-term staking of cryptocurrencies:

Germany called upon companies, institutions and individuals in mid-2021 to give input into tax considerations around the use of cryptocurrencies as well as staking and lending protocols. A major focal point was a specific clause in the Germany Income Tax Act. Section 23 rules that the windfall of any asset that is sold after a year since its acquisition is tax-free.

Related: Germany’s blockchain initiative: How adoption became a reality in 2020

Many questioned whether lending or staking virtual assets would lead to an extension of the period within which a private sale of the virtual currency used for this purpose is taxable. The German Finance Ministry stated that the 10-year period does not apply to cryptocurrencies.

Furthermore, Bitcoin miners that acquire newly minted BTC will also waive tax payments after a year of holding. Hessel also indicated that the Federal Ministry of Finance would continue to issue further guidance on the use and trade of cryptocurrencies.

Germany has taken a proactive approach to cryptocurrency regulation and oversight, adopting a national blockchain strategy in 2019. From January 2020 cryptocurrency service providers