The one-year holding period
Crypto held as private property falls under the rules for private sale transactions. Sell within a year and the gain is taxed at your personal income tax rate. Sell after more than a year and the gain is tax free, however large it is.
There is also an exemption limit for total private sale gains within a calendar year. Below it, gains stay untaxed; exceed it by a single euro and the entire amount becomes taxable — it is a threshold, not an allowance.
What counts as a disposal
More events trigger the clock than most investors assume.
- Selling crypto for euros or any other fiat currency.
- Swapping one coin for another — a taxable disposal of the coin given up.
- Paying for goods or services in crypto.
- Certain DeFi interactions, including entering and leaving liquidity pools.
Staking, lending and airdrops
Rewards from staking and lending are generally taxable as other income at the moment you receive them, valued at the market price on that day. The coins you receive then start their own holding period.
Airdrops depend on whether you did anything in return. A drop received for a service or a task is income; a purely passive drop is treated differently. Hard forks, mining and NFT trading each follow their own logic — mining in particular can tip into commercial activity, with trade tax consequences.
Reporting and past years
Foreign exchanges do not report to the German tax office the way a German bank does, but that is not the same as invisibility: transfer data reaches the authorities through several channels, and reporting obligations are tightening across the EU.
For each tax year you need a complete transaction history across every wallet and exchange, with a consistent cost basis method. If earlier years went unreported, a voluntary disclosure made before the tax office starts asking is the route that avoids a criminal outcome — timing is everything, so this should be discussed before anything is filed.
Frequently asked
Is crypto really tax free after one year in Germany?
For privately held coins, yes — gains on a disposal after more than twelve months are not taxed. The treatment differs if the activity is deemed commercial.
Do I have to report crypto if I did not sell anything?
Holding alone creates nothing to report. Swaps, spending, staking rewards and lending income do, even without a cash-out to euros.
What if I never reported past crypto years?
A voluntary disclosure can restore compliance without criminal consequences, provided it is filed before the tax office becomes aware. Do not file anything before getting advice on sequencing.
This guide is general information on German tax law, not advice on your individual case. Rules and figures change with each tax year.