Germany Specific Crypto Tax Classifications

ACCOINTING.com provides the only Germany-specific crypto tax classifications. Taxes in general are not easy to understand and there are different regulations, classifications, and exceptions. The worst part is that you have to do it once a year and forgot everything since the last time you filed your return.

When it comes to taxes in crypto, there’s not only the individual person that struggles with the regulations but also the government itself or even experienced CPAs. The reason is that this space is growing so fast and basically allows investors to use every single investment vehicle that they can find in the old banking world but in a decentralized way and sometimes even optimized compared to the old world. As a consequence, the government can’t keep up and probably has never heard about decentralized liquidity pools or some other new cool features that are being developed in the crypto ecosystem.

We partnered up with local tax experts so that we can provide all the knowledge you need to be able to file your tax report by yourself. You should definitely read this article if you:

  • are interested in crypto taxation for Germany
  • need to report your crypto taxes in Germany
  • want to learn more about the specific classifications for Germany

Now let’s deep dive into all the classifications you can find in ACCOINTING.com so that you understand the consequences of the different Income and Disposal taxations.

Incoming Transactions / Deposit: Classifications and their consequences

The following Germany-specific crypto tax classifications describe how deposits get treated in the crypto tax report in terms of taxable or not taxable and how their cost basis gets calculated. You will find the statement for the Incoming transactions in the FullTaxReport.pdf and in the Fulldataset.xls export they are either summed up in the Taxable income table or the non-taxable income table depending on their classification.

The cost basis is defined by the type as well, if you acquired the asset in a trade (e.g. swap, buy, otc,…) ACCOINTING.com defines the cost basis with the value of the sell side of this trade. If you received the asset as for example an Airdrop ACCOINTING.com will define the cost basis based on the price the asset has at the receiving date.

Classification type (incoming transaction)Taxable or not taxable?Definition of Cost basis
No classificationNot taxable (standard setting – Assign it as Income to classify it as taxable income)Cost basis: Value of the receiving date.
Buy tradeNot taxableCost basis: Proceeds of the sell side
OTC tradeNot taxableCost basis: Proceeds of the sell side
ICO tradeNot taxableCost basis: Proceeds of the sell side
HardforkNot taxableCost basis: Value of the receiving date.
AirdropNot taxableCost basis: Value of the receiving date.
MiningTaxable incomeCost basis: Value of the receiving date.
BountyTaxable incomeCost basis: Value of the receiving date.
Masternode incomeTaxable incomeCost basis: Value of the receiving date.
Staking IncomeTaxable incomeCost basis: Value of the receiving date.
Received giftNot taxableCost basis: Value of the receiving date.
Swap (DEX)Not taxableCost basis: Value of the receiving date.(if there is one amount on the sell side, you can select it as otc and use the proceeds from the sell side)
Income from gamblingNot taxableCost basis: Value of the receiving date.
Add fundsNot taxableCost basis: Value of the receiving date.
IncomeTaxable incomeCost basis: Value of the receiving date.
Liquidity pool incomeTaxable incomeCost basis: Value of the receiving date.
ReconcileNot taxableCost basis: Value of the receiving date.
Lending IncomeTaxable incomeCost basis: Value of the receiving date.
Margin gain§20 – Taxable margin trade income (separate table in the report)Cost basis: Value of the receiving date.
Definition of the taxable or not taxable event created by deposit classifications

Withdraws or Sell actions create Disposals – those are either taxable or non-taxable depending on the classification of the incoming and outgoing transaction.

This is a really important section of the classifications. There are countries like Germany where the incoming and outgoing transactions define as a combination if the transaction is seen as taxable or non-taxable event.

In Germany there are basically 3 different events for disposals: taxable Disposal Short-term, Taxable Disposal Longterm (tax free) and Non-taxable Disposal. They are all shown in different tables in the full tax report and the gains are summed up in those tables. The Taxable Disposals Longterm are taxable by the classification type but end up in the tax-free category because of the German regulation that says that all positions the investor holds for more than 1 year become tax free disposals when they get disposed.

The Disposals are summed up in the Full tax report file that you can download in ACCOINTING.com.

Transactions fees of internal transactions (e.g. from your exchange to your wallet) will show up in the Full tax report pdf summed up in a separate table.

The following matrix shows the combinations of incoming and outgoing Germany specific crypto tax classifications. It is important to understand that this combination defines if the transaction is considered taxable or non-taxable. As an example, if you receive 1 BTC as a Gift and you dispose it in a trade it would be handled as taxable disposal. If you dispose the same one as “Gift sent” it would end up in the non-taxable disposals.

(1) Use the following tax classification table for Germany only when you received tokens as: OTC, ICO, Buy (trade), No Classification, Received Gift, Swap (buy), Add funds and Reconcile.

You can use the following table to define if the disposal is taxable or non-taxable based on the incoming transaction classifications in combination with the outgoing classifications of your transaction.

As an example:

  • you received 1 BTC as a Gift and you dispose it as a payment, it would create a taxable disposal.
  • You received 1 BTC as a Gift and you dispose it as Remove funds, it would create a non-taxable disposal.
This table is only valid for the incoming Classifications:OTC, ICO, buy (trade), no classification, received gift, swap (buy), margin gain, add funds, Reconcile
Classification type (outgoing transaction)Taxable or not taxable?Definition of Cost basisSummed up in
No classificationTaxable Disposal (gets treated as a standard disposal, classify it e.g. as Remove funds to make it tax free)Proceeds: Value at the date Cost basis: Buy InformationFull tax report
Sell tradeTaxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
OTC trade (sell side)Taxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
ICO trade (sell side)Taxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
Swap (sell side)Taxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
PaymentTaxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
Used for gamblingTaxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
FeeTaxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
Interest paidTaxable DisposalProceeds: Value at the date Cost basis: Buy InformationFull tax report
Gift sentNot taxableProceeds: Value at the dateFull tax report
LostNot taxableProceeds: Value at the dateFull tax report
Remove fundsNot taxableProceeds: Value at the dateFull tax report
ReconcileNot taxableProceeds: Value at the dateFull tax report
FeeTaxable DisposalProceeds: Value at the dateFull tax report
Interest paidTaxable DisposalProceeds: Value at the dateFull tax report
Definition of the taxable / not taxable disposals in combination with specific deposit classifications

(2) Use the following tax classification table for Germany only when you received tokens as: Hardfork, Airdrop, Mining, Bounty, Masternode, Staking, Income from Gambling, Income, Liquidity pool Income, and Lending.

You’ll see that all the disposals based on the mentioned incoming classifications are tax free, because you never bought it.

This table is only valid for the incoming Classifications:Hardfork, Airdrop, Mining, Bounty, Masternode, Staking, Income from gambling, Income, Liquidity pool Income, Lending income
Classification type (outgoing transaction)Taxable or not taxable?Definition of Cost basisSummed up in
No classificationNot taxableProceeds: Value at the dateFull tax report
Sell tradeNot taxableProceeds: Value at the dateFull tax report
OTC trade (sell side)Not taxableProceeds: Value at the dateFull tax report
ICO trade (sell side)Not taxableProceeds: Value at the dateFull tax report
Swap (sell side)Not taxableProceeds: Value at the dateFull tax report
PaymentNot taxableProceeds: Value at the dateFull tax report
Used for gamblingNot taxableProceeds: Value at the dateFull tax report
FeeNot taxableProceeds: Value at the dateFull tax report
Interest paidNot taxableProceeds: Value at the dateFull tax report
Gift sentNot taxableProceeds: Value at the dateFull tax report
LostNot taxableProceeds: Value at the dateFull tax report
Remove fundsNot taxableProceeds: Value at the dateFull tax report
ReconcileNot taxableProceeds: Value at the dateFull tax report
FeeNot taxableProceeds: Value at the dateFull tax report
Interest paidNot taxableProceeds: Value at the dateFull tax report
Definition of the taxable / not taxable disposals in combination with specific deposit classifications

Germany Crypto Tax Classifications: Margin Gains, Losses and Fees are Handled Differently

The margin losses and margin fees are all summed up together with the margin gains in the fulltaxreport.pdf and use the proceeds of the transaction date to define the value. They don’t create taxable disposals, meaning when a tax lot gets closed because of a margin loss or fee it will not create a taxable disposal in the export files – it purely uses the margin gain, loss and fee proceeds to calculate the taxable gains for it. This Germany specific crypto tax classifications can help you understand how to handle them in your country.

Classification typeTaxable or not taxable?Definition of Cost basisSummed up in
Margin loss§20 -No disposal tax, but proceeds summed up in margin tableProceeds: Value at the dateFull tax report
Margin fee§20 -No disposal tax, but proceeds summed up in margin tableProceeds: Value at the dateFull tax report
Margin gain§20 – Taxable margin trade income (separate table in the report)Cost basis: Value of the receiving date.Full tax report
Definition of Margin Classifications

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