Description
{% hint style="warning" %} This article explains the general German tax framework for private individuals. It is not tailored tax advice. For individual cases, please contact a Steuerberater. {% endhint %}
In Germany, not every crypto move is taxable. Some actions are clearly taxable events, others are completely tax-neutral, and some are only taxable later. 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) – when are disposals taxable?
For private investors, crypto is treated as an "other asset" (sonstiges Wirtschaftsgut). When you dispose of it, you may realise a taxable capital gain under §23 EStG, unless you are protected by the 12-month rule or the €1,000 Freigrenze.
Taxable disposals (if within 12 months and above thresholds)
The following operations are taxable events under §23 if the asset was held less than 12 months, and your total net §23 gains for the year exceed €1,000:
Selling crypto for fiat (EUR or other currency)
Crypto-crypto trade
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 these as capital gains events and applies the 12-month rule and the €1,000 Freigrenze.
Non-taxable disposals
Even if a disposal occurs, it can be fully tax-exempt in two main cases:
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, 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) stays at €1,000 or below, those gains are not taxed (Freigrenze).
In both cases, the disposal event exists, but no income tax is due. Waltio still tracks them so that you see which operations are exempt and whether your net §23 result stays within the €1,000 limit.
Passive crypto income (§22 no. 3 EStG) – when is it taxable?
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 logic is: at the time of receipt, the fair market value (FMV) in euro is treated as taxable income under §22 no. 3, and becomes 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 in §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 part above €256)
Later sale of rewarded tokens
The later 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 ≥ 12 months → the capital gain on disposal is tax-free
If you sell them earlier → the capital gain is taxable, but can be covered by the €1,000 §23 Freigrenze
Moves that are not taxable events
There are many operations that look important in your crypto life, but do not trigger a taxable event by themselves.
Non-taxable movements
Transfers between your own wallets / exchanges — you are not selling anything; ownership does not change. The coins keep 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 unrealised gains, only on disposals or income.
Receiving gifts or inheritances — for income tax purposes, a pure gift/inheritance of crypto is not a §23 or §22 event. There may be separate gift/inheritance tax considerations.
Waltio treats transfers between your own wallets as non-taxable, preserving original cost and dates.
What about network fees / gas?
Gas or fees linked to a buy → part of the acquisition cost
Gas or fees linked to a sale or swap → disposal fees, reducing the taxable capital gain
Gas paid for a simple internal transfer → technically a small disposal, but in practice treated as non-significant to avoid flooding your report with micro-events
Losses, hacks and non-recognised events
Deductible capital losses
Losses are only recognised as §23 losses when there is a taxable disposal:
You sold at a price lower than your acquisition cost
You swapped a token at a loss
You used a token to pay for something while its value was lower than your purchase price
These losses can be used to offset other §23 gains (crypto, metals, FX…), and excess losses can be carried back or forward within this category.
Non-deductible "economic" losses
The following situations are usually not recognised as tax losses under German rules:
Loss of access to a wallet (lost seed phrase)
Hacks or thefts where there is no actual taxable disposal in your name
Pure price drops on assets you are still holding
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 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 and §23 thresholds |
Internal transfer between own wallets | No |
Simply holding crypto | No |
Loss from hack / lost private key | Generally No |