ACCOINTING.com provides the only Germany-specific crypto tax classifications. Taxes in general are not easy to understand and there are different regulations, classifications, and exceptions. The worst part is that you have to do it once a year and forgot everything since the last time you filed your return.
When it comes to taxes in crypto, there’s not only the individual person that struggles with the regulations but also the government itself or even experienced CPAs. The reason is that this space is growing so fast and basically allows investors to use every single investment vehicle that they can find in the old banking world but in a decentralized way and sometimes even optimized compared to the old world. As a consequence, the government can’t keep up and probably has never heard about decentralized liquidity pools or some other new cool features that are being developed in the crypto ecosystem.
Incoming Transactions / Deposit: Classifications and their consequences
The following Germany-specific crypto tax classifications describe how deposits get treated in the crypto tax report in terms of taxable or not taxable and how their cost basis gets calculated. You will find the statement for the Incoming transactions in the FullTaxReport.pdf and in the Fulldataset.xls export they are either summed up in the Taxable income table or the non-taxable income table depending on their classification.
The cost basis is defined by the type as well, if you acquired the asset in a trade (e.g. swap, buy, otc,…) ACCOINTING.com defines the cost basis with the value of the sell side of this trade. If you received the asset as for example an Airdrop ACCOINTING.com will define the cost basis based on the price the asset has at the receiving date.
|
Classification type (incoming transaction) |
Taxable or not taxable? | Definition of Cost basis |
| No classification | Not taxable (standard setting – Assign it as Income to classify it as taxable income) | Cost basis: Value of the receiving date. |
| Buy trade | Not taxable | Cost basis: Proceeds of the sell side |
| OTC trade | Not taxable | Cost basis: Proceeds of the sell side |
| ICO trade | Not taxable | Cost basis: Proceeds of the sell side |
| Hardfork | Not taxable | Cost basis: Value of the receiving date. |
| Airdrop | Not taxable | Cost basis: Value of the receiving date. |
| Mining | Taxable income | Cost basis: Value of the receiving date. |
| Bounty | Taxable income | Cost basis: Value of the receiving date. |
| Masternode income | Taxable income | Cost basis: Value of the receiving date. |
| Staking Income | Taxable income | Cost basis: Value of the receiving date. |
| Received gift | Not taxable | Cost basis: Value of the receiving date. |
| Swap | Not taxable | Cost basis: Value of the receiving date.(if there is one amount on the sell side, you can select it as otc and use the proceeds from the sell side) |
| Income from gambling | Not taxable | Cost basis: Value of the receiving date. |
| Add funds | Not taxable | Cost basis: Value of the receiving date. |
| Income | Taxable income | Cost basis: Value of the receiving date. |
| Liquidity pool income | Taxable income | Cost basis: Value of the receiving date. |
| Reconcile | Not taxable | Cost basis: Value of the receiving date. |
| Lending Income | Taxable income | Cost basis: Value of the receiving date. |
| Margin gain | §20 – Taxable margin trade income (separate table in the report) | Cost basis: Value of the receiving date. |
Withdraws or Sell actions create Disposals – those are either taxable or non-taxable depending on the classification of the incoming and outgoing transaction.
This is a really important section of the classifications. There are countries like Germany where the incoming and outgoing transactions define as a combination if the transaction is seen as taxable or non-taxable event.
In Germany there are 3 different events for disposals: taxable Disposal Short-term, Taxable Disposal Longterm (tax free) and Non-taxable Disposal. They are all shown in different tables in the full tax report and the gains are summed up in those tables. The Taxable Disposals Longterm are taxable by the classification type but end up in the tax-free category because of the German regulation that says that all positions the investor holds for more than 1 year become tax free disposals when they get disposed.
The Disposals are summed up in the Full tax report file that you can download in ACCOINTING.com.
Transactions fees of internal transactions (e.g. from your exchange to your wallet) will show up in the Full tax report pdf summed up in a separate table.
The following matrix shows the combinations of incoming and outgoing Germany specific crypto tax classifications. It is important to understand that this combination defines if the transaction is considered taxable or non-taxable. As an example, if you receive 1 BTC as a Gift and you dispose it in a trade it would be handled as taxable disposal. If you dispose the same one as “Gift sent” it would end up in the non-taxable disposals.
(1) Use the following tax classification table for Germany only when you received tokens as: OTC, ICO, Buy (trade), No Classification, Received Gift, Swap (buy), Add funds and Reconcile.
You can use the following table to define if the disposal is taxable or non-taxable based on the incoming transaction classifications in combination with the outgoing classifications of your transaction.
As an example:
- you received 1 BTC as a Gift and you dispose it as a payment, it would create a taxable disposal.
- You received 1 BTC as a Gift and you dispose it as Remove funds, it would create a non-taxable disposal.
This table is only valid for the incoming Classifications:
OTC, ICO, buy (trade), no classification, received gift, swap (buy), margin gain, add funds, Reconcile
| Classification type (outgoing transaction) | Taxable or not taxable? | Definition of Cost basis | Summed up in |
| No classification | Taxable Disposal (gets treated as a standard disposal, classify it e.g. as Remove funds to make it tax free) | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Sell trade | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| OTC trade (sell side) | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| ICO trade (sell side) | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Swap (sell side) | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Payment | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Used for gambling | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Fee | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Interest paid | Taxable Disposal | Proceeds: Value at the date Cost basis: Buy Information | Full tax report |
| Gift sent | Not taxable | Proceeds: Value at the date | Full tax report |
| Lost | Not taxable | Proceeds: Value at the date | Full tax report |
| Remove funds | Not taxable | Proceeds: Value at the date | Full tax report |
| Reconcile | Not taxable | Proceeds: Value at the date | Full tax report |
| Fee | Taxable Disposal | Proceeds: Value at the date | Full tax report |
| Interest paid | Taxable Disposal | Proceeds: Value at the date | Full tax report |
Definition of the taxable / not taxable disposals in combination with specific deposit classifications
(2) Use the following tax classification table for Germany only when you received tokens as: Hardfork, Airdrop, Mining, Bounty, Masternode, Staking, Income from Gambling, Income, Liquidity pool Income, and Lending.
You’ll see that all the disposals based on the mentioned incoming classifications are tax free, because you never bought it.
This table is only valid for the incoming Classifications:
Hardfork, Airdrop, Mining, Bounty, Masternode, Staking, Income from gambling, Income, Liquidity pool Income, Lending income
| Classification type (outgoing transaction) |
Taxable or not taxable? | Definition of Cost basis | Summed up in |
| No classification | Not taxable | Proceeds: Value at the date | Full tax report |
| Sell trade | Not taxable | Proceeds: Value at the date | Full tax report |
| OTC trade (sell side) | Not taxable | Proceeds: Value at the date | Full tax report |
| ICO trade (sell side) | Not taxable | Proceeds: Value at the date | Full tax report |
| Swap (sell side) | Not taxable | Proceeds: Value at the date | Full tax report |
| Payment | Not taxable | Proceeds: Value at the date | Full tax report |
| Used for gambling | Not taxable | Proceeds: Value at the date | Full tax report |
| Fee | Not taxable | Proceeds: Value at the date | Full tax report |
| Interest paid | Not taxable | Proceeds: Value at the date | Full tax report |
| Gift sent | Not taxable | Proceeds: Value at the date | Full tax report |
| Lost | Not taxable | Proceeds: Value at the date | Full tax report |
| Remove funds | Not taxable | Proceeds: Value at the date | Full tax report |
| Reconcile | Not taxable | Proceeds: Value at the date | Full tax report |
| Fee | Not taxable | Proceeds: Value at the date | Full tax report |
| Interest paid | Not taxable | Proceeds: Value at the date | Full tax report |
Definition of the taxable / not taxable disposals in combination with specific deposit classifications
Germany Crypto Tax Classifications: Margin Gains, Losses and Fees are Handled Differently
The margin losses and margin fees are all summed up together with the margin gains in the fulltaxreport.pdf and use the proceeds of the transaction date to define the value. They don’t create taxable disposals, meaning when a tax lot gets closed because of a margin loss or fee it will not create a taxable disposal in the export files – it purely uses the margin gain, loss and fee proceeds to calculate the taxable gains for it. This Germany specific crypto tax classifications can help you understand how to handle them in your country.
| Classification type |
Taxable or not taxable? | Definition of Cost basis | Summed up in |
| Margin loss | §20 -No disposal tax, but proceeds summed up in margin table | Proceeds: Value at the date | Full tax report |
| Margin fee | §20 -No disposal tax, but proceeds summed up in margin table | Proceeds: Value at the date | Full tax report |
| Margin gain | §20 – Taxable margin trade income (separate table in the report) | Cost basis: Value of the receiving date. | Full tax report |