{% hint style="warning" %} This article explains the general German tax framework for private individuals and crypto. It is not personal tax advice. For individual situations, please contact a Steuerberater. {% endhint %}
Germany is often seen as "crypto-friendly" because, in many cases, gains can actually be tax-free. That doesn't mean there is no tax at all, but it does mean there are several clear situations where no income tax is due.
There are three main pillars you need to understand:
The 12-month holding period rule for private sales
The €1,000 exemption (Freigrenze) for private sales under §23 EStG
The €256 exemption (Freigrenze) for "other income" under §22 no. 3 EStG
The 12-month rule: long-term crypto can be tax-free
Under German law, crypto held privately is treated as an "other asset" (sonstiges Wirtschaftsgut). When you sell it, the gain normally falls under §23 EStG – private sales transactions.
However, §23 contains a very favourable rule: if you sell a crypto asset after more than one year of holding, the gain is entirely tax-free for private investors.
This rule applies broadly to Bitcoin, Ethereum and other altcoins, stablecoins, and NFTs.
How is the 12-month period measured?
The holding period runs from the date (and time) of acquisition to the date (and time) of disposal. ELSTER asks you to enter not only the date but also the timestamp in the crypto section of Anlage SO: the tax office wants to check whether the 12 months are actually complete.
If you sell even a few hours too early, you are technically still within the one-year window and the gain can be taxable.
What about swaps (crypto ↔ crypto)?
Swapping one crypto for another is treated as a sale of the crypto you give up and an acquisition of the crypto you receive. So:
The old asset's holding period ends at the swap
The new asset's holding period starts on the date of the swap
Each time you swap into a different token, the one-year clock restarts for the new position.
The €1,000 exemption (Freigrenze) for private sales – §23 EStG
Under §23 EStG, all private sales (not only crypto) are aggregated: crypto sold within 12 months, physical precious metals, foreign currencies held privately, and other "private sales".
What matters is your net result from all these private sales over the calendar year:
Net gain ≤ €1,000 → no income tax on these gains
Net gain > €1,000 → the entire net gain becomes taxable (not just the portion above €1,000)
This is a Freigrenze (threshold), not a tax-free allowance.
What exactly is "net gain" here?
Total gains on private sales – total losses on private sales = net §23 result. Only if that final net result is more than €1,000 does income tax apply.
{% hint style="warning" %} Gains on crypto held more than 12 months are already tax-free under the holding-period rule and are not included in this calculation. {% endhint %}
Example: below the €1,000 threshold
You make €700 gain trading Bitcoin and ETH, all positions held less than a year. You have no other private sales. Your net §23 result = €700. Because €700 ≤ €1,000, the whole gain is tax-exempt.
Example: above the €1,000 threshold
You make €900 gain on crypto (held < 1 year). You make €300 gain on physical gold (also a §23 private sale). Net §23 result = €1,200. Because €1,200 > €1,000, the entire €1,200 is taxable – not just €200.
What can Waltio tell you here?
Waltio computes your crypto component of §23: your total taxable gains and losses on crypto disposals (held < 1 year) and your net §23 result for crypto only. We cannot see your other private sales (e.g. gold), so only you (or your advisor) can decide whether you remain below or above the €1,000 threshold.
The €256 exemption for passive crypto income – §22 no. 3 EStG
If you receive tokens as staking rewards, lending interest, mining proceeds, airdrops, or similar, this is usually taxed as "other income from services" – §22 no. 3 EStG.
Here, the German Income Tax Act provides another annual Freigrenze:
Total §22(3) income ≤ €256 → nothing is taxed
Total §22(3) income > €256 → the entire amount is taxable (not only the part above €256)
What counts towards the €256?
All income that legally falls under §22 no. 3 in that year: staking rewards, lending interest, mining rewards, many types of airdrops, and potentially non-crypto §22(3) income. Each reward is valued at its fair market value in euro on the day of receipt.
Waltio converts all your crypto rewards to euro at the time of receipt and sums them as "passive crypto income (§22 no. 3)".
What happens when you later sell the rewarded tokens?
The tax story has two stages:
At receipt — FMV = taxable income under §22 (if above the €256 Freigrenze in total). The same FMV becomes their acquisition cost.
At disposal — this is a §23 private sale: if you hold them ≥ 12 months, the gain is tax-free; if you sell them earlier, the gain may be taxable but can be covered by the €1,000 §23 Freigrenze.
Do I need to file anything if I'm below the thresholds?
From a purely legal perspective:
Gains exempt under §23 (12-month rule or net gain ≤ €1,000) do not generate income tax
Income exempt under §22 no. 3 (≤ €256) likewise does not generate tax
In practice, many taxpayers who are clearly below the Freigrenzen do not fill in Anlage SO for these small amounts, but keep proper records (e.g. the Waltio report) in case the tax office asks.
Quick recap: when can crypto be tax-free in Germany?
For private investors, your crypto can be fully tax-exempt in any of these situations:
You sell after more than 12 months of holding → the gain is tax-free under §23
Your total net §23 gain (crypto + other assets) in the year is €1,000 or less → all those gains are tax-exempt
Your total §22 no. 3 income (staking, mining, airdrops, etc.) is €256 or less → that income is tax-exempt
Waltio is built around these exact rules: we separate your operations by category (§23 vs §22), compute your gains and income accordingly, and give you all the numbers you need to understand how much is taxable and how much is already tax-free under German law.