Until now, you had to stake or lend your coins for at least 10 years if you are in Germany to get a tax break. However, the Federal Ministry of Finance has decided to remove this 10-year holding period. The announcement was made on 28th April 2022 at the blockchain roundtable of the FDP parliamentary group. As Germany gets crypto-friendly tax rules, it also shows how fast we are advancing to a crypto-centric world.
The crypto-friendly tax rules in Germany
From now on, your staking and lending profits will be tax-free if held for more than 1 year. The Federal Ministry of Finance will soon have a letter ready for the German Tax authorities to serve as a guideline. The CDU and SDP from the old federal government wanted to stick to the 10-year period, but it seems that the ministry is taking a proactive approach. The new rule also shows that the FDP is giving positive signals to the crypto industry.
In the blockchain where the new tax rules were announced, 50 guests were invited. Werner Hoffmann, crypto tax expert, says that he was surprised about the same. Werner didn’t expect the roundtable to discuss much deviating from the usual.
Defi Specialist Peter Grobkopf said, “The BMF critically dealt with the feedback from the community in advance and made changes. It is very welcome that the new federal government and the FDP regime in the Federal Ministry of Finance want to strengthen Germany as a crypto location.”
Confusions need to be resolved
There are still inconsistencies in the documentation and reporting requirements for crypto transactions that must be resolved in the future. Frank Schäffler used the example of never paying for coffee with cryptocurrency in Germany because currently, he must submit this to the tax office. “The paperwork effort is excessive,” Werner Hoffmann says. According to the expert, Germany needs small-value legislation or a tax-free norm for crypto-to-crypto transactions. The Federal Ministry of Finance intends to issue a separate letter on the subject in the fall of 2022.
What are your thoughts as Germany gets crypto-friendly tax rules? And do you think that more nations will introduce such positive laws sooner or later? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.