Germany promises no taxes on crypto that have been held for more than a year

Germany promises no taxes on crypto that have been held for more than a year ...

Germany has confirmed new tax restrictions on virtual assets this week, indicating that investors who would anticipate a year or more to sell their crypto assets would face zero taxes on their digital assets.

According to Blockworks, Germans are heavily involved in Bitcoin and Ethereum, with the country offering 14% of Ethereum nodes and 9% of Bitcoin nodes. According to Gemini, 17% of Germans have invested in cryptocurrency.

After consultations with stakeholders from Germany''s financial sector and 16 states, Germany''s taxation system regulating cryptocurrency and blockchain was clearly detailed. This is the first national tax guidance on cryptocurrency in Germany.

The country is considering whether or not staking or lending cryptocurrency provides a decade-long tax exemption on the sale of the cryptocurrency. The deadline would not be extended to ten years if, for example, Bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else to establish their block, according to State Secretary Katja Hessel.

According to Blockworks, eliminating the 10-year hurdle is one of Germany''s primary objectives, which is already a significant breakthrough and makes Germany a very attractive country crypto-tax-wise, according to EU policy expert.

Although the new tax recommendations were silent on non-fungible tokens, airdrops would be subject to income tax if the recipient discloses their personal information. However, if the recipient does not, there will be no such taxations. People usually pay taxes on airdrops, but there will be a number of exceptions, according to Hansen.

Employees who pay for crypto tokens will not see their assets taxable until they are traded.

According to Blockworks, the guidance classified cryptocurrency tokens according to classifications such as utility, security, equity, and debt. Hybrid tokens would be subject to taxation on a "transaction-by-transaction basis."

Germany is certainly ahead of most other countries in the world in terms of crypto regulation, taxes, [anti-money laundering] regulations, particularly its travel rules implementation, and the licensing of crypto businesses, according to Hansen.

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