certify
Home arrow Article arrow Article Detail

First nationwide guidance on the income tax treatment of cryptocurrencies issued by Germany's federal finance ministry (BMF)

Profile Image

Indrani bose Follow

INDIA

May, 13 2022

May, 13 2022

likes | comments 0

Article Image

According to a release, on Wednesday, Germany's federal finance ministry (BMF) issued the first nationwide guidance on the income tax treatment of cryptocurrencies which also includes other blockchain-based tokens.

It is a 24-page document that covers and explained technically various aspects of crypto-related issues in terms of Germany’s income tax law. In a statement, parliamentary state secretary Katja Hessel said that after one year of owning the assets individuals can sell acquired cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH). According to the finance ministry, the main point of guidance covers crypto-related topics such as mining, staking, lending, hard forks, and airdrops, as well as tax implications of buying and selling bitcoin and ether. Further, Staking and lending protocols may also use digital assets under the new guidance. Section 23 of the German Income Tax Act specifies that those gains are tax-free if more than one year passes between the acquisition and sale of an asset.

This issue has become one of the most intensely discussed topics in recent months. To qualify for a tax exemption, cryptocurrencies held for stake or profit generation may have to behold for up to ten years."The deadline is not extended to ten years if, for example, bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else to create their block," Hessel added. In the release percentage rate of the crypto, income tax was not disclosed.

In mid-February, the Bahamas let residents pay taxes with cryptos. Bahamas residents began paying taxes with cryptos in mid-February. According to Hesse, the publication of the guidance is not the end of their engagement with the topic but an interim result. "Of course, the publication of the guidance is not the end of our engagement with the topic, but an interim result,” said Hessel.

According to Hessel, the German government is already working on a supplementary document that will focus on the cooperation between the federal states and their commitments to the issue. The new German government included cryptocurrencies and blockchain technology in its coalition agreement which are referred to as key elements that will support the country’s development over the next four years. After six months of which publication of the guidance on the income tax treatment of virtual assets came.


likes | comments 0

Profile Image

Indrani bose

CBW - External Analyst

INDIA

Comments
Disclaimer: The information is for informational purposes only.​ This advertisement does not constitute financial advice or any other advice. You should consult with a financial professional to determine what may be best for your individual needs. None of the information and/or content available through this advertisement is intended as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any company, financial product, security or commodity. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable or result in any investment or other losses. In Making the investment decision, investors must rely on their own examination of the issuer and the terms of the offerings, including the merits and risks involved. Investments are speculative, illiquid, and involve a high degree of risk , including the possible loss of investment.