Crypto Tax in Germany: The One-Year Rule and Everything Around It

Germany taxes privately held crypto as a private sale transaction under section 23 of the Einkommensteuergesetz, which means a gain is taxable only where less than one year passed between acquisition and disposal, and even then stays free of tax if your total private sale gains for the calendar year came to less than 1,000 euros.

That is the rule everyone has heard about, and it is genuinely as favorable as it sounds for someone who buys and holds. The complications sit around the edges: which units you are treated as having sold, what a "disposal" includes, and what happens when the asset has been earning something. This page explains the mechanics, not tax advice, and the regulatory picture for German residents is at Germany.

What section 23 says

The statute puts crypto in a category with other movable assets rather than with securities. Section 23 of the Einkommensteuergesetz applies to sale transactions "bei anderen Wirtschaftsgütern, bei denen der Zeitraum zwischen Anschaffung und Veräußerung nicht mehr als ein Jahr beträgt," meaning sale transactions involving other assets where the period between acquisition and disposal is not more than one year (source: section 23 EStG, gesetze-im-internet.de, September 2026).

Read that carefully, because the logic runs the opposite way from most countries. It is not that a long holding gets a discount. It is that a disposal outside the one-year window falls outside the charging provision entirely.

The clock runs per acquisition, from the date you acquired those units to the date you disposed of them. That makes the acquisition date of every purchase a tax-relevant fact, not just its price.

The 1,000 euro figure is a cliff, not an allowance

Section 23 provides that gains remain tax free "wenn der aus den privaten Veräußerungsgeschäften erzielte Gesamtgewinn im Kalenderjahr weniger als 1 000 Euro betragen hat," that is, where the total gain from private sale transactions in the calendar year came to less than 1,000 euros (source: section 23 EStG, September 2026).

Two consequences follow from the exact wording, and both are missed regularly.

It is also a calendar year total across all private sale transactions, not a per-asset or crypto-only figure. Other assets falling under section 23 in the same year count toward the same total.

What counts as a disposal

The one-year test only helps if you know when you disposed of something, and the answer is broader than selling for euros.

Each of these can turn a position you thought you were holding into a completed transaction inside the one-year window.

Which units did you sell

If you bought the same asset on several dates and sell part of the holding, the answer to which units left determines whether the one-year test is met. The method used to identify them is therefore central to the calculation in Germany in a way it is not in a country with pooled averaging.

The Federal Ministry of Finance addresses identification, valuation, and related questions in its letter on income tax treatment of certain crypto assets, "Einzelfragen zur ertragsteuerrechtlichen Behandlung bestimmter Kryptowerte," dated 6 March 2025 (source: Bundesministerium der Finanzen, September 2026).

The ten-year provision

Section 23 contains an extension that anyone earning something on their holdings should know about. For assets "aus deren Nutzung als Einkunftsquelle zumindest in einem Kalenderjahr Einkünfte erzielt werden," meaning assets from whose use as a source of income earnings were generated in at least one calendar year, "erhöht sich der Zeitraum auf zehn Jahre," the period extends to ten years (source: section 23 EStG, September 2026).

How this provision applies to crypto used for staking or lending has been the most argued question in German crypto taxation, and the Ministry's 6 March 2025 letter is where the administration's current position on crypto specifically is set out. Because we could not retrieve that letter, this page does not state how the extension applies to staked or lent crypto. If you stake, lend, or otherwise earn on your holdings, treat this as the point to check first rather than as settled.

Rewards are a separate question

Tokens you receive rather than buy raise their own issue: whether the receipt is taxable when it arrives, at what value, and what acquisition date the received tokens carry for the purposes of the one-year test.

Rewards from staking, lending, an airdrop, or mining are each addressed on their own terms rather than by a single rule, and the Ministry's letter is again the source. What is safe to say generally is that a reward creates a record on receipt and a second record on disposal, so both dates and both values need capturing. Our guide to staking covers how the rewards are produced.

Which rate applies

Section 23 sits among the income tax act's rules on private sale transactions rather than among its rules on capital income, and the two are assessed differently. We could not confirm the applicable rate treatment from a primary source while writing this, so confirm it for your circumstances rather than assuming the flat rate that applies to bank and securities income.

Records

Keep the acquisition date, the acquisition cost, the quantity, the euro value at each transaction, the fees, and the platform for every purchase and every disposal. In Germany the acquisition date carries as much weight as the price, because it decides whether the transaction is inside the charging provision at all.

Frequently Asked Questions

Is crypto held longer than a year really tax free in Germany?

For privately held assets, section 23 charges gains where not more than one year passed between acquisition and disposal, so a disposal outside that window falls outside the provision. The ten-year extension for assets used as a source of income is the exception to check if you have been earning on the holding.

Does the 1,000 euro figure work like a tax-free allowance?

No. The wording makes gains tax free where the calendar year total came to less than 1,000 euros. Cross that line and the gain is taxable rather than only the excess.

Does swapping one token for another restart the clock?

Yes. A swap disposes of the first asset and acquires the second, so the holding period on the new asset begins at the swap.

Do I have to declare a gain that is under the threshold?

Declaration requirements and the charge to tax are separate questions, and the answer depends on your wider circumstances. Confirm your filing obligation rather than assuming that a tax free gain is also an unreportable one.

Does this apply to crypto held through a business?

No. Section 23 governs private sale transactions. Assets held in a business are dealt with under the rules for business income, which produce a different result entirely.