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An analysis by Flick Gocke Schaumburg, Taxand Germany
Germany’s Federal Ministry of Finance recently issued an updated circular on the income-tax treatment of cryptocurrencies. It features improved terminology, technological notes on crypto-assets, key substantive legal aspects, and stricter reporting and verification requirements for crypto investors.
Taxpayers must declare transactions on both public blockchains and Centralised Exchanges and can use tax software such as Blockpit or CoinTracking, provided that the reports are complete, plausible, and consistent. Tax offices can request raw data or additional information for verification.
Taxpayers are responsible for processing transaction data for tax purposes, with strict cooperation obligations starting from the 2025 assessment period. Choosing between private and business assets affects tax consequences and reporting obligations, requiring a considered decision on the commercial or private nature of crypto investments.
Tax experts from our German member firm, Flick Gocke Schaumburg have published a more detailed analysis of these updates, which you can read in full here.
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