German Bitcoin and Taxation: Holding Period, Savings Plan, ETP and Mining

German Bitcoin Tax Guidelines: Rules, Exceptions and Future Outlook

In Germany, if the time between the purchase and sale of bitcoins exceeds twelve months, the proceeds of selling bitcoins are tax-free. If sold within twelve months, the proceeds will be taxed at your personal income tax rate (up to 45%) plus a solidarity surcharge. There is a tax exemption of 1,000 euros per year.

The above are the basic rules. But in practice, the problem most people encounter is not the rule itself, but situations that are not covered by the rule: for example, a savings plan with twelve different maturities, a Bitcoin ETP (exchange-traded product) with different rules, or the transfer from an exchange to a wallet. This article will analyze the tax cases unique to Bitcoin in detail. For general basics of all cryptocurrencies, please refer to our German cryptocurrency tax guide.

Basic rules for Bitcoin taxation (two-sentence summary)

For tax purposes, Bitcoin is not considered a security, but an "other economic good." According to Article 23 of the German Income Tax Act, selling it from private assets is a private disposal, and its tax treatment depends on the holding period. The Federal Fiscal Court confirmed this view in its judgment of February 14, 2023 (case No. IX R 3/22).

This distinguishes it from stocks: anyone selling shares regardless of how long they have held them is subject to a fixed withholding tax of 25%; and anyone selling after holding Bitcoin for more than thirteen months will not be subject to tax, even if the gain reaches 500,000 euros.

Bitcoin Savings Plan: Twelve purchases, twelve deadlines

The most common misunderstanding lies in the perception of savings plans. The twelve-month period does not apply to your overall portfolio or calendar year, but applies to each individual investment purchase.

Each instalment becomes tax-free only on the twelfth month after its respective purchase, rather than the entire savings plan as a whole. Suppose you invest 200 euros per month starting in January 2026, and by the end of the year you will have twelve positions, each with a different deadline. The January installments will be tax-free in January 2027, while the December installments will not be tax-free until December 2027.

If you sell part of your position in June 2027, tax-exempt and taxable positions will coexist in it. The principle of "order of consumption" is followed in determining which ones are deemed to have been sold: according to the notice issued by the German Federal Ministry of Finance on March 6, 2025, individual designation allocations apply first; if individual designation is not possible, the first-in, first-out method is adopted (i.e., the earliest purchased coins are deemed to be the first disposed of). This order works in your favor because it prioritizes the oldest and therefore tax-exempt positions.

In practice, this means:

• Record the date, amount and price of each savings plan installment.
• Most brokers provide such lists, but not all formats are acceptable to the tax authorities. How to automate these records, please refer to our comparative analysis of Bitcoin savings plans.

What is regarded as a sale of Bitcoin

For tax purposes, it is not just conversion into euros that is regarded as a disposal. The following three circumstances will also trigger tax liability when a position is held for less than twelve months:

• Converting to other cryptocurrencies: Anyone who converts Bitcoin to Ether will realize the gains of Bitcoin even if no euros are flowing. For the acquired Ethereum, the new holding period starts at the same time.
• Payment using Bitcoin: It is calculated at market price on the date of purchase, which is considered a tax disposal.
• Converting into stablecoins: USDT and USDC are also crypto assets, so this conversion is considered a disposal.

In contrast, there is no tax on transferring Bitcoin between your own addresses. Anyone sends Bitcoin from an exchange to a hardware wallet without disposing of it, does not interrupt the holding period, and does not trigger taxes. However, you must carry the acquisition data (such as purchase date and cost) along with it; otherwise, no one can later prove when the coin was purchased.

Bitcoin ETP, ETN, and ETC: The Second Tax World

Any investor who does not purchase Bitcoin directly, but does so through an exchange-traded product (such as the physical support ETP provided by CoinShares, Invesco, or 21Shares) may be in a different tax category. These products are usually purchased through ordinary securities accounts.

For exchange-traded products, the structure determines the tax treatment, not the underlying assets.

The key lies in the right to request delivery . If a product gives you the right to demand delivery of stored bitcoins, there are good reasons to treat it as something similar to direct ownership: Article 23 of the German Income Tax Act and a twelve month holding period apply. This position is based on Xetra-Gold's relevant case law, which was ruled in the same way by the Federal Fiscal Court.

If there is no claim for delivery, it may be regarded as other capital claims. At this time, Article 20 of the German Income Tax Law applies. Regardless of the length of the holding period, the tax is subject to a fixed withholding tax of 25%, but losses are allowed to be deducted from the investment income pool.

This classification has not yet been finalized. The Supreme Court has not yet ruled on crypto-ETP, and the custodian banks have inconsistent treatment of these products. Some institutions deduct fixed taxes even if investors advocate a 12-month holding period. If certainty is needed, it is inevitable to seek professional advice on individual cases. Before purchasing, be sure to check the product terms: they clearly state whether there is a right to request delivery.

Problems with Bitcoin Mining and Commercial Activities

The key to mining is scale. People who occasionally mine receive "income from other services" under Article 22 (3) of the German Income Tax Code, with an annual tax exemption of 256 euros. If mining continues for profit purposes, it constitutes a commercial activity, followed by trade taxes, accounting obligations, and the definition of commercial assets.

For block rewards earned for running their own hardware, tax authorities usually assume that they are commercial activities. The value of coins generated by mining at the time of production is commercial income and also constitutes the acquisition cost of future sales.

For miners holding coins as commercial assets, it is important: There is no twelve month period here. The one-year tax exemption applies only to private assets.

Giving Bitcoin and Inheritance

Giving is not a disposal and therefore does not trigger income tax. Instead, there is a gift tax and its exemption: 500,000 euros between spouses, 400,000 euros per child, and 20,000 euros between non-relatives, once every ten years.

Recipients inherit the status of the giver: they take over the giver's acquisition date and acquisition cost. If the donor purchased the coins twelve months ago, the recipient can immediately sell them duty-free. The same principle applies to inheritance.

To do this, the source must be proved. If there is no evidence of the date and cost obtained, the tax department will take unfavorable circumstances to you in case of doubt.

Bitcoin Loss

The loss from selling Bitcoin within a one-year period can only offset the gain from other private disposals that year. Labor income or stock gains cannot be offset. The remaining portion may be carried forward for one year or indefinitely.

One of the things that is often overlooked is: You must report losses, otherwise they do not exist for tax purposes. The Inland Revenue Service will recognize them only if they appear in Appendix SO. Anyone who does not report a loss year gives up the opportunity to deduct future earnings.

Total losses due to the bankruptcy of the exchange or loss of the private key are more difficult to handle taxically. It is not regarded as a disposal and is only recognized by the tax authorities under strict conditions.

Buying Bitcoin through Brokers and Emerging Brokers

Anyone buying Bitcoin through Emerging Brokers should check what they actually get. Some providers keep real coins in wallets, while others track prices through derivatives or ETP. This means the difference between Articles 23 and 20 in tax terms.

The second point concerns extractability. If you can move Bitcoin to your own address, a stronger argument points to true ownership. If not possible, classification becomes more complex. The impact of this on specific providers, such as Trade Republic, is discussed in case studies.

Change expectations for 2027

On September 8, 2026, the German Federal Ministry of Finance issued a draft to enter into inter-departmental coordination. The draft proposes to treat Bitcoin's future as investment income: a fixed withholding tax of 25% plus a solidarity surcharge will be levied regardless of the length of the holding period.

For Bitcoin investors, two points are crucial. First, the deadline is intended to be future-oriented: it only covers coins acquired after December 31, 2026. According to the draft regulations, purchases made before this will still be subject to current rules. Secondly, no legislation has yet been passed. Before the draft, there were also procedures such as association hearings, cabinet deliberations, three debates in the Bundestag, and review by the Bundestag.

For details on deadlines, see our article on the "grandfather clause" and deadlines, and our comparison of the two tax models in discussion.

Bitcoin Tax FAQs

How much tax do I need to pay on Bitcoin earnings?

No tax is required after holding for more than twelve months. During the period, a personal income tax rate of 14% to 45% will apply, plus a solidarity surcharge.

When will Bitcoin earnings be exempt from tax?

When more than one year passes between acquisition and sale, or when the total proceeds from private disposal during the year are less than € 1,000.

Do I have to declare Bitcoin on my tax return?

Taxable sales should be included in Appendix SO. Sales after expiration do not need to be reported; however, losses should be reported.

Does the holding period also apply to savings plans?

Yes, but each installment is calculated separately. Each month's execution is an independent acquisition with an independent deadline.

How is Bitcoin ETP taxed?

It depends on the structure. If there is a right to claim delivery, there is a strong reason to treat it like direct ownership, with a twelve-month holding period applicable; if there is no, a fixed withholding tax applies. This issue has not yet been finalized.

Is there a tax on transfers to hardware wallets?

No. Moving between your own addresses is not a disposal and does not interrupt the holding period.

What happens if I give away Bitcoin?

Gifts do not trigger income tax, but may trigger gift tax. The recipient takes over the acquisition date and acquisition cost.

Source

• Federal Fiscal Court, Judgment of February 14, 2023, Case No. IX R 3/22
• Notice by the German Federal Ministry of Finance, March 6, 2025, on individual issues regarding the income tax treatment of certain crypto assets, reference number IVC1-S2256/00042/064/043
• Articles 23 and 22 (3) of the German Income Tax Act, Article 20 EStG on investment income
• Inheritance Tax and Gift Tax Law, Article 16 on tax exemptions
• German Bundestag, Introduction to the 2027 Federal Budget: bundestag.de
• Details of the draft released after the report on September 8, 2026. The full text has not yet been officially released.
• Regarding exchange-traded products, there is a separate guide detailing their structure: ETP Bitcoin Taxation.

(As of September 9, 2026. This document does not constitute tax advice or investment advice. It is not a substitute for consultation based on your personal circumstances, and the legal position may change.)