Crypto haven countries #5: Germany
On May 11, 2022, the German Ministry of Finance released a statement on the taxation of cryptocurrencies, which details how the authorities intend to treat cryptocurrency proceeds from staking, lending and airdrops. Individuals will not have to pay taxes on the sale of their Bitcoin or Ether if they have held their cryptocurrency for more than a year. This makes Germany one of the most crypto-friendly nations, confirming a recent report released by Coinmarketcap. Furthermore Germany has more BTC nodes per capita than the United States. The German Ministry also clarified that using BTC or ETH for staking and lending purposes does not result in an extension of the minimum one-year term. This is in stark contrast to many countries, which view staking income as taxable and will help drive crypto capital to Germany unless other countries also align with this tax policy. The Ministry also underlined that the current tax regulation is not final because the German government explain that in the future the tax policy on cryptocurrencies, also in consideration of technological evolution, could also change towards more severe directions.
Companies operating in the cryptocurrency sector must be licensed by the German financial regulatory authority BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht — The Federal Financial Supervisory Authority).
In November 2022 Bitpanda announced to be the first European retail investment platform to receive a full licence from BaFin for custody and proprietary trading of crypto assets. Thanks to the Fund Location Act (Fondsstandortgesetz) that went into effect on July 1, 4,000 institutional funds can invest 20% of their portfolios in crypto assets in Germany.
In the Coincub annual crypto tax ranking 2022, Germany ranks first among the top five countries with the best crypto tax for residents. In the overall ranking score table categories, Germany places seventh globally. To read the report, click here.
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