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Usha Yadav
May 13, 2022
by Usha Yadav

Germany's Finance Ministry has Released New Cryptocurrency Tax Guidelines

Germany Cryptocurrency Tax Guidelines
Germany's federal finance ministry has issued crypto tax guidelines. After one year of holding, German citizens can now sell bitcoin (BTC) or ether (ETH) tax-free. The tax implications of crypto-centric activities, including mining, staking, lending, hard forks, and airdrops, are also addressed in the rules. Certain optimistic storylines continue to guide the cryptoverse's boat amidst increased uncertainty regarding cryptocurrencies worldwide, as the global crypto market cap plummeted to $1.2 trillion. The German federal finance ministry has provided instructions on the taxation of cryptocurrency. Germany established cryptocurrency tax regulations.

The letter from the German finance ministry is the first nationwide directive on the subject, stating that cryptocurrencies that have been staked or lent for more than a year are still tax-free. Individuals might also sell bitcoin (BTC) or ether (ETH) tax-free after one year of holding, according to Parliamentary State Secretary Katja Hessel. Mining, staking, lending, hard forks, and airdrops are all covered in this document.

Buying and Selling Bitcoin 

The tax status of buying and selling bitcoin and ether is also discussed in the announcement. According to the guidance, the one-year timeframe also applies to bitcoin that has been leased out or used as a stake to build new Ethereum blocks by someone else. Hessel also said that cryptocurrency would not be eligible for the alternative ten-year holding period for non-mobile assets like property. According to the advice, income tax does not apply when redeeming utility tokens, which are crypto-assets that grant a specific privilege, such as access to a network or the ability to obtain a particular product. According to the finance ministry, redeeming the tokens does not count as a sale under income tax legislation, citing a 2018 court decision addressing bearer bonds.

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Germany's Finance Ministry has Released New Cryptocurrency Tax Guidelines
Usha Yadav
Usha is a diehard crypto enthusiast and has been actively writing on different facets of the blockchain and crypto world. She has authored many research articles on cryptocurrency and aims to provide informational and quality content to readers. She firmly believes that crypto has a great potential to redefine the world of finance and blockchain.