Profits with cryptocurrencies
Crypto Tokens
Crypto values or currency tokens, among them the well-known Bitcoin, have recently established themselves not only as a means of payment (e.g. as legal tender in El Salvador), but also as a popular object of speculation. Since private sales transactions are generally taxable within certain speculation periods, the Federal Fiscal Court/BFH has also dealt with crypto transactions in detail.
BFH ruling
The Federal Fiscal Court/BFH confirmed the taxability of crypto transactions in its ruling of 14.2.2023 (Ref. IX R 3/22). Virtual currencies in the form of currency tokens count as virtual currencies among the other assets that are the subject of a private sale transaction. The acquisition transaction is fulfilled with the purchase against exchange in euros or another (virtual) currency. Currency tokens are deemed to be disposed of when they are exchanged back into euros or another (virtual) currency. If the period between acquisition and disposal does not exceed one year, this is a taxable private disposal transaction (Section 23 (1) sentence 1 no. 2 of the German Income Tax Act/ EStG). In the case in dispute, a taxpayer had carried out bitcoin transactions in the years 2014 to 2016. With the argument that currency tokens were not economic goods, the did not convince the BFH.
No enforcement deficit
The BFH also does not see any enforcement deficit with regard to the enforcement of the tax liability. After all, it remains up to the tax authorities to obtain information on the individual transactions of various taxpayers from the operators of crypto exchanges by means of collective information requests. The introduction of an obligation for the automatic exchange of information of crypto operators is the subject of the EU Mutual Assistance Directive (DAC 8).
Update: May 29, 2023
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