Investment income via CFDs or funds

Brokers recognized the potential of crypto currencies quite early. Meanwhile, many CFD brokers have switched to offering difference contracts for the crypto currency segment as well. Traders profit here from the opportunity to make a profit in bull and bear markets.

At the same time, the crypto fund sector is increasingly developing further. Currently, the possibility of issuing ETFs is being pursued intensively. But the crypto market can also be used to earn money indirectly – through blockchain ETFs. Income from this segment is included in investment income. As is well known, the latter are subject to the final withholding tax (solidarity and church taxes are levied additionally) of 25 percent.

Sell BTC & Co.: Capital gains

Where cryptocoins are actually owned, the bases of taxation differ. These are capital gains and losses. Means: Anyone who buys BTC and sells it again after less than 12 months falls into this category. If this period is exceeded, i.e. if BTC and Co. are sold after more than one year, taxation based on the speculation period is waived.

Mining as a tax issue

Trading cryptocoins is one thing. From the point of view of the tax office, mining falls into a special category. Income earned as a miner in Germany does not fall under capital income, but – according to the view of the lawyers – belongs to the income from a business enterprise. This fact is relevant in several respects, for example with regard to costs for mining (hardware and electricity) and the aspect that trade tax – at least in theory – can become an issue. However, miners in Germany (due to electricity costs) do not have the best position.

The fact is that revenues from crypto currencies are taxable in Germany. The challenge, however, is the proof. Brokers issue certificates and proofs for this. In the case of the well-known trading centres in this field, the situation quickly looks quite different, which can present the individual trader with considerable challenges.