Introduction
Germany has one of the most favourable crypto tax regimes in Europe for the patient holder. Crypto is treated as a private asset ("privates Veräußerungsgeschäft", § 23 EStG), not as a classic financial product. The rule that changes everything: if you hold for more than a year, the gain is fully tax-exempt. This module explains that logic simply, so you understand when you pay, when you don't, and how to declare. Important: this content is educational, not personalised tax advice — for your situation, consult a tax adviser (Steuerberater).
The principle: private asset and the 1-year rule
In Germany, selling crypto you've held for more than a year (365 days) triggers no tax on the gain. None. This is the cornerstone of the system: crypto is a private asset, and the sale of a private asset held over a year falls outside the taxable scope.
Conversely, if you resell within a year, the gain is taxed. So the moment that matters isn't only "am I selling?", but above all "how long have I held?". The period is counted per purchase lot, using the FIFO method (first in, first out).
Like in France, I'll be taxed as soon as I sell my crypto for euros.
Actually : Not in Germany. If you've held for over a year, the sale is 100% tax-exempt, whatever the size of the gain. Holding time outweighs the mere act of selling.
Held under a year: the progressive rate
If you sell before the one-year mark, the gain isn't taxed at a flat rate: it's added to your taxable income and follows the progressive income-tax scale (Einkommensteuer). Depending on your overall income, that ranges from 0% up to roughly 45%.
In practice, the higher your other income, the more heavily your short-term crypto gain is taxed. And the lower your income, the gentler the rate. It's the opposite of a single flat rate: your personal situation matters.
- Held ≥ 1 year: full exemption, €0 tax.
- Held < 1 year: gain added to taxable income.
- Progressive scale: from 0% to roughly 45% based on your overall income.
The €1,000 Freigrenze: a limit, not an allowance
Since 2024, private-sale gains (all combined) are exempt as long as their annual total stays below €1,000. But watch the exact word: it's a Freigrenze (an exemption limit), not a Freibetrag (a tax-free allowance).
The difference is crucial. If your total gains for the year stay at €999, everything is exempt. But if they reach €1,001, it's not just the part above €1,000 that becomes taxable: it's the entire gain. The limit works like a switch, not a reduction.
An added bonus: losses realised on private sales can offset your gains of the same kind within the year. You work out your net result before checking the limit.
Freigrenze ≠ allowance
€1,000 of gains = €0 tax. €1,001 of gains = the whole €1,001 becomes taxable, not just €1. Keeping an eye on this limit before selling at year-end can genuinely matter.
How to declare, and the role of a French account
Private-sale gains are declared on the "Anlage SO" annex of your income-tax return (Einkommensteuererklärung) to your tax office (Finanzamt). You report your taxable sales there, keeping a record of your lots (purchase dates, FIFO) to evidence the holding period.
Deblock is regulated in France, not in Germany. That doesn't change your duty: as a German resident, it's up to you to declare your own gains to your Finanzamt. The account doesn't declare on your behalf and removes no German filing obligation.
On staking or lending: their rewards have their own tax treatment, distinct from the gain on a sale. Check your specific situation — when in doubt, a tax adviser (Steuerberater) is the right call.
- Declared on the "Anlage SO" of the Einkommensteuererklärung.
- Keep a record of your lots (purchase dates, FIFO).
- German resident = you declare to the Finanzamt yourself.
What you should remember
- 01Held > 1 year = gain 100% tax-free. That's Germany's flagship advantage.
- 02Held < 1 year = gain added to income, progressive rate (0% to ~45%).
- 03€1,000 Freigrenze a year: a limit — exceeding it makes the whole gain taxable.
- 04Declared on the Anlage SO to the Finanzamt. Educational content, not tax advice — consult a Steuerberater.
Simplified calculation
- Holding ≥ 365 days: full exemption, no tax.
- Holding < 365 days: gain added to taxable income.
- Progressive income tax: 0% to 45% based on global income.
- Annual exemption: €1,000 of crypto gains per year since 2024 (Freigrenze).
1-year rule
The 1-year period counts per purchase lot (FIFO method). It is the flagship tax advantage of the German market.
Small gains exempt
Since 2024, the first €1,000 of crypto gains per year is exempt even for short-term holdings.
Staking and lending
The 1-year holding rule still applies even for crypto used in staking or lending: the feared extension to 10 years was ruled out by the tax authority in 2022. Staking/lending rewards themselves are taxed as other income when received.
Check with the local tax authority. This page stays educational and does not replace personalised advice.
Simulate your investment and its tax
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