How are cryptocurrencies taxed?
Cryptocurrencies such as Bitcoin or Ethereum are digital coins. You can buy, sell, or trade them. Many people use cryptocurrencies to make money, for example, through buying and selling or earning interest and rewards. This is also relevant for the tax office. There are rules about when you have to pay tax on cryptocurrencies.
The Ministry of Finance published new rules on this in March 2025 (BMF letter dated 06.03.2025). These already apply to the 2024 tax year.
When do I have to pay tax?
If you buy a cryptocurrency and sell it later, this can be a “private sale transaction”. This means: If less than one year passes between buying and selling, you must pay tax on the profit.
However, there is a tax allowance: If your profit for the whole year is under 1,000 Euro, you do not have to pay tax.
Also, exchanging one cryptocurrency for another counts as a sale. Profits are therefore also relevant here.
If you sell after one year, it is tax-free. This applies even if you have received interest or rewards during this time – the period remains one year.
What is staking or lending?
You can also “lend” or “provide” your cryptocurrencies to earn interest or rewards. This is called “staking” or “lending”.
If you receive new cryptocurrencies in this way, these are other income. You must calculate the value of the new coins in Euro and declare it in your tax return.
If you sell them later, this can additionally be a “sale” – and therefore taxable again.
What is an airdrop?
With an “airdrop”, you receive free cryptocurrencies. Sometimes you have to do something for it, such as advertising or providing data. In this case, it is consideration, and the cryptocurrencies are taxable.
If you receive cryptocurrencies without doing anything, this is not taxable. However, if you sell them later, this can be taxable again – as with a normal sale.
What happens in a “hard fork”?
Sometimes a cryptocurrency is “split” – a new, additional coin is created. This new coin also belongs to you.
If you sell it, you must tax the profit as with the original purchase – from the point when you bought the old coin.
What do I have to declare to the tax office?
You must declare all profits and income from cryptocurrencies in your tax return honestly and completely.
The tax office needs evidence:
- Which coins did you buy?
- When and for how much?
- When did you sell them?
- How much profit or loss did you make?
It is best to save all transactions – for example, from the exchange or wallet where you trade. There are also programmes that create “tax reports”. These help to record everything properly.
Important: If you trade on foreign exchanges or decentrally (e.g. via an app without registration), you have special cooperation obligations. You must document particularly well in these cases.
One more note:
There are also special cryptocurrencies such as “utility tokens” (for certain access) or “security tokens” (with interest or repayment). These may be subject to different tax rules – for example, capital gains. It depends on the individual case.
Tip: Keep a list or use a tax tool. Record when you bought or sold something. This way, you avoid trouble with the tax office and keep track.
Note: These rules apply to the 2024 tax year. They are based on the Federal Ministry of Finance's letter dated 6 March 2025. Earlier rules have been replaced.
