Anyone who buys and sells Bitcoin, Ethereum, or other cryptocurrencies as a private individual in Germany may owe tax on the profit under certain conditions. Contrary to popular belief, there is no single blanket „crypto tax law“ — cryptocurrencies are treated as „other economic goods“ for tax purposes, and profits from selling them fall under the rules for private disposal transactions under § 23 of the German Income Tax Act (EStG). This guide explains the three core rules — holding period, exemption threshold, and the FIFO method — in plain language, and shows you how to get a rough estimate of your own tax liability with our free Crypto Tax Calculator in a few minutes.
Important note: This article and calculator apply strictly to German tax law and do not reflect the rules of your own country of residence. They do not replace individual tax advice. The legal situation can change, and special cases (e.g. commercial trading, staking, mining, or DeFi) may follow different rules. For a legally binding tax return, consult a German tax advisor (Steuerberater) or use specialized crypto tax software.
Table of Contents
The Holding Period: Tax-Free After One Year
The single most important rule in German crypto tax law is the one-year (365-day) holding period. It works simply:
- If you hold a cryptocurrency for more than 365 days before selling it, the entire profit is tax-free — regardless of how large it is. Whether your profit is €500 or €500,000 doesn’t matter, as long as the holding period is met.
- If you sell within 365 days of buying, the profit is generally treated as taxable — this is where the exemption threshold comes in (see next section).
The holding period starts on the day of purchase and ends on the day of sale. A purchase made on January 1, 2025 can be sold tax-free starting January 2, 2026 (more than 365 days later).
The Exemption Threshold under § 23 EStG: €1,000 Since 2024
If the holding period is under one year, that doesn’t automatically mean tax is owed. There is an exemption threshold that applies to the sum of all private disposal transactions in a calendar year — not just crypto, but also e.g. sales of artwork or precious metals within the speculation period.
- Since tax year 2024, this threshold is €1,000 per calendar year.
- Through 2023, it was €600.
The key word is „threshold“ (Freigrenze), not „allowance“ (Freibetrag) — a distinction that trips up a lot of people:
- If the sum of all private disposal profits for the year stays below the threshold (e.g. under €1,000), the entire amount is tax-free.
- If the sum reaches or exceeds the threshold, the entire amount becomes taxable — not just the part above the threshold. With a profit of €1,500 (above the €1,000 threshold), you owe tax on the full €1,500, not just €500.
This is what distinguishes a “Freigrenze” from an allowance (like the German Sparerpauschbetrag for capital gains), where only the excess amount would be taxed. This mix-up is one of the most common misunderstandings about German crypto taxation.
FIFO: Which Purchase Belongs to Which Sale?
If you bought the same cryptocurrency multiple times at different points and prices, you need to know — when you sell part of your holdings — which specific purchase is matched to that sale, since this determines the holding period and profit for that specific transaction.
In Germany, the First-In-First-Out method (FIFO) is generally applied in practice: the units bought first are treated as the units sold first.
Example:
- Purchase 1: 0.1 BTC on January 1, 2025 for €4,000
- Purchase 2: 0.1 BTC on June 1, 2025 for €5,500
- Sale: 0.1 BTC on February 1, 2026 for €7,000
Under FIFO, this sale is matched against the first purchase (January 1, 2025). The holding period is therefore more than 365 days, and the €3,000 profit (€7,000 minus €4,000) is tax-free. If the later purchase had been matched instead, the holding period would have stayed under one year, making the profit potentially taxable.
It’s therefore best to keep a precise log of every purchase and sale (date, amount, price) from the start — either manually or using specialized crypto tax software that applies FIFO automatically.
How to Use Our Crypto Tax Calculator
To get a quick sense of your potential tax liability under German rules, we built a free, interactive calculator: the Crypto Tax Calculator.
- Enter one already FIFO-matched buy/sell pair per row (buy date, buy amount, quantity, sell date, sell amount).
- The calculator instantly shows you, per trade, whether the holding period is met (tax-free) or not.
- For all trades under the one-year holding period, it automatically sums the profits per calendar year and compares them against the €1,000 exemption threshold (with a toggle for the older €600 rule through 2023).
- Optionally, enter your personal marginal tax rate for a rough estimate of the resulting tax.
Important: The entire calculation runs directly in your browser via JavaScript — your trade data is never sent to any server. The calculator is for general orientation only and does not replace individual tax advice.
Frequently Asked Questions About German Crypto Taxation
Do I have to report every crypto trade on my tax return?
Generally, yes — even tax-free profits (holding period > 1 year, or under the threshold) should be documented in case the tax office asks. Taxable profits from private disposal transactions are reported on Anlage SO of your German income tax return.
Does the holding period also apply to crypto-to-crypto swaps (e.g. BTC to ETH)?
Yes. Swapping one cryptocurrency for another is also treated as a disposal transaction for tax purposes and — depending on the holding period — can trigger tax on the profit realized up to that point.
Does the one-year holding period still apply if I used staking or lending?
The legal situation has evolved in taxpayers’ favor here: Germany’s Federal Ministry of Finance has clarified that staking or lending generally does not extend the holding period to ten years, as was sometimes assumed in the past. The normal one-year period still applies. The tax treatment of the staking rewards themselves (ongoing income) is a separate topic not covered by this calculator.
What if I made a loss?
Losses from private disposal transactions can be offset against profits from private disposal transactions in the same or future years — which can reduce your tax burden in loss years or subsequent years.
Conclusion
The three central rules for private crypto taxation in Germany can be summarized simply: held for more than a year, tax-free; held for less than a year, taxable once annual profit reaches €1,000 (and then the full amount is taxable); and FIFO determines which unit counts as sold when you’ve bought multiple times. Our Crypto Tax Calculator lets you apply these rules directly to your own trades for a first overview — for your final tax return, we still recommend consulting a German tax advisor or specialized crypto tax software.
