The Federal Ministry of Finance had already published a letter on the subject in May 2022. Why isn’t that enough?
Such letters from the Federal Ministry of Finance – another one has just been published as a draft on documentation requirements – are initially just an internal instruction, practically an instruction for action to the tax administration. This does not directly bind taxpayers. And such a letter certainly cannot replace a legal regulation, i.e. a missing legal regulation.
Also read: How the crypto scene is celebrating the recent record highs
Now let’s take another look at the current practice of the tax offices. How is taxation actually carried out? Normally, capital gains, such as shares or interest, are subject to the flat rate of withholding tax.
Things are different with crypto transactions. Here you are generally taxed at the personal income tax rate. The profit is calculated according to the FiFo method, for “First in, First out” – when selling, it is assumed that the coins of the respective cryptocurrency that were bought first will also be the first to be sold again. This can be a good thing in terms of the holding period because it is often longer. With regard to profits, however, the regulation is rather disadvantageous when prices rise very quickly – as in February 2024 – because relatively low acquisition costs are then used and the profit is correspondingly higher.