Germany Eases Taxes on Cryptocurrency

March 2, 2018 Taxation in EU

bitcoin tax in GermanyBERLIN – Germany is setting up new rules for taxation of cryptocurrency, and they are likely to be a hit with crypto-users.

On February 27th the tax authorities of Germany issued a new document detailing the taxation of cryptocurrency use in the country.

Unlike many other countries in the world, including the USA, Germany will consider Bitcoin, and other cryptocurrency, to be a digital currency and not an asset.

The impact of the decision is that purchases made with any cryptocurrency in Germany will not face capital gains tax, and will be taxed as though the transaction was carried out using standard payment methods.

In other countries, cryptocurrency can be considered to be an asset, and as such, can trigger capital gains tax obligations when sold or traded.

Further, any service providers which convert cryptocurrency to fiat currency, or vice versa, will be regarded to be providing a conversion service, and not swapping an asset for money, thereby circumventing any extra taxation beyond normal VAT and income tax.

In an additional move, which will prove popular with cryptocurrency miners, any mining activity which leads to the issue or receipt of cryptocurrency will also not be taxed.