Bitcoin Taxes in Germany: The One-Year Rule and €1,000 Limit Explained

Photo: Sven Teschke / Wikimedia Commons, CC BY-SA 3.0 DE

You bought some Bitcoin, the price went up, and now you are wondering: do I have to pay tax if I sell? If you live in Germany and hold your coins privately, the answer depends mostly on two things: how long you held them, and how big your gain is.

This beginner guide explains the one-year rule, the €1,000 limit, which coins count as sold, staking rewards and where it all goes in your tax return.

Why crypto sales count as "private sales"

In Germany, crypto held as a private person is not taxed like shares. The Federal Ministry of Finance (BMF) treats crypto-assets as "other assets" (andere Wirtschaftsgüter) under § 23 Abs. 1 Satz 1 Nr. 2 EStG, the rule for private sales (private Veräußerungsgeschäfte). The Federal Fiscal Court (BFH) confirmed this in 2023 (IX R 3/22).

The law says a private sale is taxable when the time between buying and selling is not more than one year. A taxable gain is added to your other income and taxed at your personal income tax rate.

Important: according to the BMF, exchanging crypto for euros, goods, services or another crypto-asset is a sale. So swapping Bitcoin for Ether, or paying with Bitcoin, can be taxable, and a new one-year period starts for the coins you receive.

The one-year rule

Sell more than one year after buying and the gain is not taxable as a private sale, however large. Sell within one year and it can be taxable.

• When does the clock start? On a central exchange, the times recorded by the exchange count. For direct trades, for example on a decentralised exchange, the times in your wallet usually count.
• The gain is the sale price minus purchase costs and related costs such as transaction fees.

The €1,000 limit: a Freigrenze, not a Freibetrag

Short-term gains are not always taxed. Under § 23 Abs. 3 Satz 5 EStG, gains stay tax-free if your total gain from all private sales in a calendar year is less than €1,000. Until tax year 2023 the limit was €600; the €1,000 limit applies from 2024.

The word that matters is Freigrenze (exemption limit). It is not a Freibetrag (allowance):

• With a Freibetrag, only the amount above the allowance would be taxed.
• With a Freigrenze, it is all or nothing. Below €1,000 everything is tax-free. At €1,000 or more, the whole gain is taxable, not just the part above €1,000.

The limit counts all private sales together, so a short-term gain on gold, for example, adds to your crypto gains.

Losses from private sales can only offset private-sale gains (same year, previous year or later years), not your salary or other income.

Which coins did you sell? FIFO and the wallet view

If you bought Bitcoin at different times and sell part of it, which coins were sold? The BMF letter (margin no. 61 and 62) says:

1. Individual tracking first. If you can show exactly which units you sold, that counts.
2. Otherwise FIFO for the holding period. The coins of one type (for example Bitcoin) bought first are treated as sold first ("first in, first out").
3. For the gain amount, the average cost method applies, but for simplicity you may also use FIFO.

This applies per wallet and per coin type, and you keep a chosen method until that wallet's coins of that type are all sold.

Staking and lending: different rules

According to the BMF, rewards from passive staking (for example via a pool or an exchange) and from lending are income from services under § 22 Nr. 3 EStG, valued at the market price when received.

• €256 Freigrenze: such income is tax-free if it totals less than €256 in a calendar year. At €256 or more, the whole amount is taxable.
• No ten-year holding period: the law extends the period to ten years for assets used to earn income, but the BMF says this does not apply to currency or payment tokens (margin no. 63). For other token types it is less clear, so get advice.
• Reward coins are newly acquired, so their own one-year period starts when you receive them.

Example scenarios

The amounts below are hypothetical examples, assuming no other private sales or service income that year unless stated.

Example	Held	Gain or income	Result
Sell Bitcoin for euros	8 months	€800 gain	Tax-free (below €1,000)
Sell Bitcoin for euros	8 months	€1,200 gain	All €1,200 taxable
Sell Bitcoin, plus €300 short-term gain on gold	8 months	€900 + €300 = €1,200	All €1,200 taxable (limit counts all private sales)
Sell Bitcoin for euros	14 months	€5,000 gain	Not taxable (held more than one year)
Swap Bitcoin for Ether	6 months	€1,500 gain	All €1,500 taxable; Ether's one-year clock starts at the swap
Staking rewards received	n/a	€200 for the year	Not taxable (below €256)

The BMF letter: what changed in 2025

Tax offices follow the BMF letter on crypto-assets. The 6 March 2025 version replaced the letter of 10 May 2022. Main changes:

• Detailed record-keeping and cooperation duties (Mitwirkungs- und Aufzeichnungspflichten), from margin no. 87.
• Foreign and decentralised exchanges: an extended duty to cooperate, including regularly downloading your full transaction history. Lost data, for example after an exchange's bankruptcy or a hack, counts against you.
• Tax reports from crypto tax tools can help, but the tax office may ask for the underlying files.
• New guidance on claiming staking rewards and on exact-time or daily prices.

Tip: for each sale, record the coin, amount, purchase and sale dates and prices, gain and holding period.

Where it goes in your tax return

Taxable crypto gains are declared in your annual income tax return on Anlage SO (other income), in the section for private sales. Staking and lending income under § 22 Nr. 3 EStG also goes on Anlage SO, in the section for services (Leistungen). Line numbers change between years, so check your year's form.

How this links to DAC8

Since 1 January 2026, EU crypto providers collect customer transaction data under DAC8, and tax authorities exchange it from 2027. DAC8 does not change the German rules above; it makes it easier for the Finanzamt to check your return. For the details, read our guide DAC8 Explained: What EU Crypto Tax Reporting Means for You From 2026.

A reform is being discussed

A BMF draft bill (Referentenentwurf) from September 2026 would tax certain privately held crypto-assets as capital income from 1 January 2027, only for coins acquired after 31 December 2026. It is a draft, not law; the rules above still apply.

Important disclaimer

This is not financial, investment, legal or tax advice. It is general information on German rules for private persons as of October 2026. Your case may differ, for example if your trading counts as a business, you use DeFi or NFTs, or the law changes. For complex cases, talk to a tax adviser (Steuerberater) or your Finanzamt.

Bottom line

Hold Bitcoin more than one year and the gain is not taxable in Germany. Sell sooner and it is taxed at your personal rate unless your total private-sale gains stay below €1,000, a Freigrenze, so reaching it taxes the whole gain. Swaps count as sales, FIFO applies when you can't track coins, and staking income has its own €256 limit. Keep records, declare on Anlage SO, and get professional help for complex cases.

Sources

• Gesetze im Internet: § 23 EStG Private Veräußerungsgeschäfte
• Gesetze im Internet: § 22 EStG Arten der sonstigen Einkünfte
• BMF: Einzelfragen zur ertragsteuerrechtlichen Behandlung bestimmter Kryptowerte (6 March 2025)
• Berlin Senate Department for Finance: FAQ Kryptowerte
• BMF: Draft bill on reforming the taxation of crypto-assets held privately (PDF)

Advice Me publishes general information only. It is not financial, investment, legal, or tax advice. Always do your own research and consult a qualified professional before making financial decisions.