📝 Description
This article explains the general German tax framework for private individuals. It does not constitute tailored tax advice. For individual cases, please consult a Steuerberater.
In Germany, not every crypto move is taxable. Some actions are clearly taxable events, others are completely tax-neutral, and some are only taxable at a later stage. This article gives you a practical overview, aligned with how Waltio classifies your operations.
We'll look at crypto through two lenses:
Capital gains transactions (§23 EStG – private sales)
Passive income (§22 no. 3 EStG – other income)
⚖ Crypto as "private sales" (§23 EStG)
For private investors, crypto is treated as an "other asset" (sonstiges Wirtschaftsgut). When you dispose of it, you may realize a taxable capital gain under §23 EStG, unless you are protected by the 12-month rule or the €1,000 Freigrenze.
Taxable disposals
The following operations are taxable events under §23 if the asset was held for less than 12 months, and your total net §23 gains for the year exceed €1,000:
Selling crypto for fiat currency (EUR or other currencies)
Crypto-to-crypto trades
Using crypto to pay for goods or services
Selling NFTs (treated like other crypto assets, not as securities)
Disposals of rewarded tokens (staking, mining, airdrops, etc.)
Waltio classifies all of these as capital gains events and applies the 12-month rule as well as the €1,000 Freigrenze.
Non-taxable disposals
Even when a disposal occurs, it can be fully tax-exempt in two main scenarios:
You held the asset for at least 12 months — the gain is tax-free for private individuals under §23. This applies to coins, tokens, NFTs, and stablecoins.
Your total net §23 gains for the year are €1,000 or less — even if you traded short-term, if your overall net gain from all private sales (crypto + other assets) remains at or below €1,000, those gains are not taxed (Freigrenze).
In both cases, the disposal event takes place, but no income tax is due. Waltio still tracks them so you can see which operations are exempt and verify whether your net §23 result remains within the €1,000 limit.
Special case: Buying crypto with foreign currency (e.g., USD)
In Germany, privately held foreign currencies may also fall under §23 EStG.
If you use an actual USD balance to purchase cryptocurrency, you are effectively disposing of that USD. This disposal may trigger a taxable foreign exchange gain or loss if the USD was held for less than 12 months.
💡 How Waltio handles this: Waltio focuses exclusively on cryptocurrency taxation.
When you purchase crypto using USD:
Waltio correctly records the acquisition cost of your newly purchased cryptocurrency in EUR.
Waltio does not calculate any foreign exchange gain or loss arising from the disposal of the USD used for the purchase.
⚠️ Important: You are responsible for calculating any applicable foreign currency gains or losses outside Waltio and combining them with your taxable crypto gains and other relevant private disposal transactions to determine whether the annual €1,000 exemption threshold (Freigrenze) has been exceeded.
➕ Passive crypto income (§22 no. 3 EStG)
Some crypto operations do not involve selling anything but still generate income in tokens. For private individuals, these are usually classified as "other income from services" – §22 no. 3 EStG.
Taxable passive income (at receipt)
The following are typically taxable as income at the moment you receive the tokens:
Staking rewards
Lending interest
Yield farming / liquidity mining rewards
Mining proceeds
Airdrops
For all of these, the tax principle is identical: at the time of receipt, the fair market value (FMV) in EUR is treated as taxable income under §22 no. 3, and subsequently serves as the acquisition cost of those tokens for future §23 calculations.
When can passive income be tax-exempt?
Passive income can be fully covered by the €256 annual Freigrenze:
If your total income under §22 no. 3 (crypto + non-crypto) for the year is €256 or less → this income is not taxed.
If the total exceeds €256 → the entire §22(3) income becomes taxable (not just the amount exceeding €256).
Later sale of rewarded tokens
The subsequent disposal of these tokens (staking/mining rewards, etc.) is treated as a §23 private sale:
Acquisition cost = FMV at receipt (which may already have been taxed as income)
Holding period starts on the date of receipt
If you hold them for ≥ 12 months → the capital gain on disposal is tax-free
If you sell them earlier → the capital gain is taxable, but can still be covered by the €1,000 §23 Freigrenze
💡 Moves that are not taxable events
Many operations may seem significant in your day-to-day crypto activity, but do not trigger a taxable event on their own.
Non-taxable movements
Transfers between your own wallets/exchanges — you are not selling anything; beneficial ownership does not change. The assets retain their original acquisition date and cost.
Internal reorganisations of your holdings — as long as there is no disposal, there is no §23 event.
Simply holding crypto — you are not taxed on unrealized gains, only on disposals or income.
Receiving gifts or inheritances — for income tax purposes, a pure gift or inheritance of crypto is not an event under §23 or §22. Separate gift or inheritance tax rules may apply.
Waltio treats transfers between your own wallets as non-taxable, preserving your original costs and dates.
What about network fees / gas?
Gas or transaction fees linked to a purchase → added to the acquisition cost
Gas or transaction fees linked to a sale or swap → deductible disposal fees, reducing the taxable capital gain
Gas paid for a simple internal transfer → technically a minor disposal, but in practice treated as non-significant to prevent cluttering your report with micro-events
📤 Losses, hacks and non-recognized events
Deductible capital losses
Losses are only recognized as §23 losses when a taxable disposal occurs:
You sold at a price lower than your acquisition cost
You swapped a token at a loss
You used a token to pay for goods or services while its value was lower than your purchase price
These losses can be used to offset other §23 gains (crypto, precious metals, foreign currencies, etc.), and excess losses can be carried back or carried forward within this category.
Non-deductible "economic" losses
The following situations are generally not recognized as tax-deductible losses under German tax law:
Loss of access to a wallet (e.g. lost seed phrase)
Hacks or thefts where no taxable disposal in your name takes place
Unrealized price drops on assets you continue to hold
💡 Overview table
Operation | Taxable? |
Sell crypto for EUR (held < 12 months) | Yes (if net §23 gain > €1,000) |
Sell crypto for EUR (held ≥ 12 months) | No |
Swap crypto ↔ crypto (held < 12 months) | Yes |
Swap crypto ↔ crypto (held ≥ 12 months) | No |
Pay for goods/services in crypto | Yes (if < 12 months) or tax-free (if ≥ 12 months) |
Sell NFT | Yes/No depending on holding period and thresholds |
Staking rewards, lending interest, mining, airdrops (at receipt) | Yes, if total §22(3) income > €256 |
Later sale of rewarded tokens | Yes/No depending on holding period and §23 thresholds |
Internal transfer between own wallets | No |
Simply holding crypto | No |
Loss from hack / lost private key | Generally No |
Buying crypto using a foreign currency balance (e.g., USD) | The crypto acquisition itself is not taxable. However, the disposal of the foreign currency may be taxable under §23 EStG. Any applicable FX gains or losses must be calculated outside Waltio. |