{% hint style="warning" %} This article is for general information only and does not constitute tax advice. For personalised guidance, please consult a Steuerberater (tax advisor). {% endhint %}
In Germany, crypto is not treated like shares or a bank account. For private individuals, it usually falls into the rules for "private sales transactions" and "other income". Understanding the difference between these two is the key to understanding German crypto taxation.
Waltio follows these rules to compute your gains and help you fill in your German tax return.
Two tax categories for crypto
For private investors (not acting as a business), crypto is generally taxed under:
Capital gains on disposals — Einkünfte aus privaten Veräußerungsgeschäften (§23 EStG). Declared in Anlage SO (section for private sales / crypto & tokens).
Passive income in crypto — Sonstige Einkünfte aus Leistungen (§22 Nr. 3 EStG). Declared in Anlage SO (section for "other income / services").
In practice: when you sell, swap or spend crypto → §23 capital gains bucket. When you receive crypto as a reward (staking, mining, lending, airdrops, etc.) → §22 passive income bucket.
Capital gains: trading, selling and spending crypto (§23 EStG)
What counts as a taxable disposal?
Under §23 EStG, the following are typically taxable disposals:
Selling crypto for euro or another fiat currency
Swapping one crypto for another (crypto ↔ crypto)
Using crypto to pay for goods or services
Selling an NFT (treated like other crypto assets)
The 12-month holding period
Germany has a very important rule for private individuals: if you sell a cryptocurrency after holding it for at least 12 months, the gain is tax-free.
If you dispose of the crypto within 12 months of acquiring it, any gain is potentially taxable. This rule also applies to stablecoins, altcoins and NFTs.
Each asset has its own holding period. When you swap one crypto for another, the old one is considered sold and the new one starts with a new acquisition date.
The €1,000 annual exemption (Freigrenze) for private sales
On top of the 12-month rule, German law offers an annual exemption on all §23 private sales:
Net gain ≤ €1,000 → gains are not taxable
Net gain > €1,000 → the entire gain becomes taxable (threshold, not allowance)
{% hint style="warning" %} Gains on crypto held more than 12 months are already tax-free and do not count towards the €1,000 limit. {% endhint %}
How is the gain calculated?
For each taxable disposal:
Capital gain = Proceeds – Acquisition cost – Deductible fees
Proceeds: sale price in euro, or FMV of the crypto received in a swap, or value of the good/service paid with crypto
Acquisition cost: original purchase price + fees linked to the purchase, or FMV of the crypto given in a previous swap, or FMV at receipt if tokens were previously taxed as income (§22)
Deductible fees: exchange trading fees on the sale, gas used to execute the sale or swap
Cost basis method (FIFO per wallet)
Waltio uses FIFO per wallet (first in, first out):
Each wallet or exchange is tracked separately
When you transfer crypto between wallets, the transferred units keep their original acquisition date and cost
When you sell from a wallet, the oldest units are disposed of first
Passive crypto income: staking, mining, lending, airdrops (§22 Nr. 3 EStG)
Some operations generate rewards in tokens. For private individuals, these are usually classified as "other income from services" – §22 Nr. 3 EStG. This typically includes:
Staking rewards
Lending interest (CeFi or DeFi)
Yield farming / liquidity mining rewards
Mining proceeds
Airdrops (in many cases)
Taxation at the time of receipt
German tax law taxes these rewards when you receive the tokens, at their fair market value (FMV) in euro on that date:
The FMV at receipt is treated as taxable income in §22
The same FMV becomes the acquisition cost of those tokens in your portfolio
Later, when you sell these tokens, the sale is treated like any other §23 disposal: if held ≥ 12 months → tax-free; if sold earlier → potentially taxable but can benefit from the €1,000 §23 exemption.
The €256 annual exemption for §22 income
Total §22(3) income ≤ €256 → not taxed
Total §22(3) income > €256 → the full amount is taxable (threshold, not allowance)
How are losses treated?
Capital losses on taxable disposals (§23) can only be offset against capital gains from other private sales (crypto, metals, FX, etc.). They cannot be offset against salary, interest or dividends.
Within §23:
Gains and losses are netted over the year: Net §23 result = Total gains – Total losses
If the net gain is ≤ €1,000, it is covered by the Freigrenze
Excess losses can typically be carried back one year or carried forward indefinitely, but only against future §23 gains
Gains on crypto held > 12 months are tax-free, and losses on such positions are not deductible
Losses due to hacks, theft, or losing access to a wallet (without a taxable disposal) are generally not recognised as deductible losses
How Waltio helps with German crypto taxes
Waltio is designed to follow these German rules as closely as possible:
We classify each operation as either §23 capital gains or §22 passive income
We apply FIFO per wallet to track acquisition cost and holding periods
We distinguish gains that are taxable (disposals < 12 months, income above thresholds) from gains that are exempt (disposals after 12 months)
We calculate your total gains/losses under §23 and your total passive income under §22, and highlight the values relevant for Anlage SO
We cannot see other assets you might have (gold, FX, etc.), so we cannot decide for you whether the €1,000 and €256 exemptions are fully available. But we give you a complete and consistent picture of your crypto side, so you (and your Steuerberater) can finish the job with clarity.