Crypto Taxation in Germany Confirm the cited source.

01Is cryptocurrency tax-free in Germany after one year?

Yes. Section 23(1) No. 2 of the Einkommensteuergesetz (EStG) classifies cryptocurrency as a sonstiges Wirtschaftsgut (other economic good). Private individuals who hold cryptocurrency for more than 12 months and then dispose of it pay no income tax on the gain, regardless of the amount. The Bundesministerium der Finanzen (BMF) confirmed this treatment in its comprehensive administrative letter of 10 May 2022 -- 'Einzelfragen zur ertragsteuerrechtlichen Behandlung von virtuellen Waehrungen und sonstigen Token' -- and reaffirmed it in the updated letter of 6 March 2025 (titled 'Einzelfragen zur ertragsteuerrechtlichen Behandlung bestimmter Kryptowerte'). The 12-month period runs from the date of acquisition of each specific lot, using the FIFO (first-in, first-out) method where lots cannot be individually identified, per the BMF 2022 and 2025 letters.

02How are short-term crypto gains taxed?

Disposals within the 12-month holding period generate taxable income reported as sonstige Einkunfte (other income) on Anlage SO of the German income tax return. The gain is added to the individual's total income and taxed at the progressive marginal rate under the EStG. Per PwC Worldwide Tax Summaries for Germany, the 2025 brackets for single filers are: 0% up to EUR 12,096; 14% to 42% from EUR 12,096 to EUR 68,429 (geometrically progressive); 42% from EUR 68,430 to EUR 277,825; and 45% above EUR 277,825. A solidarity surcharge (Solidaritaetszuschlag) of 5.5% applies on the income tax amount for higher earners -- with full Soli applying where income tax on total taxable income exceeds approximately EUR 105,500 for single filers. The effective combined top marginal rate (income tax 45% plus Soli 5.5% of that tax) reaches approximately 47.5%. Losses within the holding period offset gains within the same period.

03What is the EUR 1,000 annual exemption?

Section 23 EStG includes a Freigrenze (threshold) for total private-disposal gains. Importantly, this is a Freigrenze -- not a Freibetrag (allowance). If annual gains from all private disposals (including crypto) stay below EUR 1,000, the entire amount is tax-free. If gains reach or exceed EUR 1,000, the full amount becomes taxable -- there is no partial deduction. The threshold was raised from EUR 600 to EUR 1,000 for tax year 2024 and subsequent years. A separate, lower threshold of EUR 256 applies to income under section 22 No. 3 EStG (covering staking rewards and similar miscellaneous income). The EUR 1,000 and EUR 256 thresholds are independent of each other.

04How are staking and mining treated?

The 2022 BMF letter (reaffirmed in 2025) resolved a significant area of prior uncertainty regarding staking. Before 2022, some advisers had suggested that lending or staking cryptocurrency could trigger a 10-year holding period extension under section 23(1) No. 2 EStG (the provision that extends the period to 10 years for assets generating income in at least one calendar year). The BMF explicitly rejected this interpretation: staking and lending do not extend the holding period. Cryptocurrency used in staking retains its original 12-month clock, and if the underlying assets were held more than 12 months before disposal, the gain remains tax-free. Staking rewards received are taxable as sonstige Einkunfte under section 22 No. 3 EStG at fair market value in EUR on the date of receipt, with the EUR 256 annual threshold. Mining income follows a different path: mining at commercial scale is classified as business income under section 15 EStG, subject to marginal income tax rates plus Gewerbesteuer (municipal trade tax). Small-scale private mining may qualify as section 22 No. 3 EStG other income with the EUR 256 threshold, but the boundary between hobby and commercial activity depends on scale, equipment, and systematisation. Consult a Steuerberater registered with the Steuerberaterkammer for activity-specific classification. See the Germany country overview for the broader German tax context.

For jurisdiction comparisons and to connect with a verified German tax professional, browse the Germany tax-pros directory. All content above summarises publicly available regulatory guidance; it is not a substitute for qualified professional counsel on individual circumstances.