Selling Cryptocurrencies Tax-Free: 1-Year Rule and Allowances in 2026

Are you unsure how to correctly handle your cryptocurrencies for tax purposes in Germany and optimize your profits? Many crypto investors are confused by the complex tax rules. However, there is good news: under certain conditions, you can realize your crypto gains in Germany completely tax-free! This guide explains the most important rules, such as the one-year holding period and the annual tax-free threshold, so you can trade your digital assets with peace of mind.

1. The 1-Year Rule: How to Sell Crypto Tax-Free

In Germany, cryptocurrencies are considered other assets (§ 23 EStG). The decisive rule for tax-free gains is the one-year holding period:

• Basic Principle: After a holding period of twelve months, all profits from the sale of Bitcoin, Ethereum, and other digital assets are completely tax-free – regardless of the amount of the profit.
• Example of a Tax-Free Sale:
  • Purchase of Bitcoin: January 1, 2025
  • Holding period begins: January 2, 2025
  • Tax-free sale from: January 2, 2026
• FIFO Principle: If you buy the same cryptocurrency multiple times, the FIFO principle ("First In, First Out") applies. The coins purchased first are considered sold first. This is important for the correct calculation of the holding period in the case of partial sales.

2. The Annual Tax-Free Threshold for Short-Term Gains

Even if you sell cryptocurrencies before the one-year holding period expires, there are ways to remain tax-free:

• Tax-Free Threshold of 1,000 Euros: Since 2025, the annual tax-free threshold for private disposal transactions has been 1,000 Euros (previously 600 Euros).
• Complete Tax Exemption: If your total gains remain below 1,000 Euros per year, they are completely tax-free.
• Caution if Exceeded: If you exceed this threshold by even one Euro, the entire profit becomes taxable.
• Comprehensive Application: The threshold applies to all private disposal transactions, not just crypto.
• Pro Tip: Plan your sales strategically to either stay below the threshold or wait for the one-year holding period to pass.

3. What Happens if Profits are Taxable?

If you sell cryptocurrencies before the holding period expires and exceed the tax-free threshold, the profits are subject to income tax:

• Tax Rate: 14% to 45% – depending on your total income.
• Solidarity Surcharge: An additional 5.5% (for higher incomes).

Important Taxable Events:

• Exchanging Cryptocurrencies: Exchanging, for example, Bitcoin for Ethereum is considered a sale and a new purchase for tax purposes.
• Paying with Crypto: Using it as a means of payment is considered a sale of the assets.

4. Special Features of Staking and Lending

• Mining & Staking Income: As other income, these are subject to a separate tax-free threshold of 256 Euros per year.
• Staking and Holding Period: Since April 2022, the speculation period is no longer extended by staking; the normal one-year holding period applies.
• Lending and Holding Period: If you lend out cryptocurrencies (lending), the holding period can extend to 10 years. Current case law has not yet been conclusively settled.

5. Documentation Requirement: How to Prove Transactions

For tax-free sales and correct reporting in your tax return, seamless and complete documentation of your crypto transactions is essential.

Evidence for the Tax Office:

• Purchase date and purchase price
• Sale date and sale price
• Transaction fees
• Wallet addresses and exchanges used

Recommendation: Use crypto tax software for automatic documentation.

6. When is a Tax Return Required?

You must file a tax return if:

• Your profits from crypto investments exceed 1,000 Euros per year.
• You want to claim losses.
• Your income from mining or staking exceeds 256 Euros.

7. Loss Offsetting for Crypto Investments

• Offsetting: Losses from crypto investments can only be offset against gains from other private disposal transactions.
• Exception: No offsetting possible with stock market gains.
• Loss Carryforward: A loss carryforward to subsequent years is possible.

8. Current Legal Developments and Outlook

Germany is internationally considered crypto-friendly – primarily due to the one-year tax exemption. In countries like the USA and France, all crypto gains are taxed.

• Planned Changes: The SPD is planning to abolish the tax exemption after one year and tax cryptocurrencies like stocks.
• Status Quo: The change has not yet been decided and is legally problematic retroactively. If it were to come, Germany would become less attractive as a crypto hub.

9. Strategies for Tax-Optimized Crypto Investment

• Hold Long-Term: Buy and hold crypto for at least one year for complete tax exemption.
• Simplified Documentation: Less effort after the holding period.
• Professional Advice: Use professional tax advice for complex portfolios or uncertainties.

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Conclusion

Germany offers crypto investors attractive opportunities for tax-free gains with the 1-year holding period and the 1,000 Euro tax-free threshold:

• After one year: Complete tax exemption
• Under 1,000 Euros: Tax exemption even with a shorter holding period
• Complete documentation: Important for evidence and transparency
• Monitor legal changes!

With the right strategy and planning, you can make crypto investments in Germany largely tax-free.

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Disclaimer – Legal Notice from WEEX Exchange

WEEX and its affiliates offer services for the exchange of digital assets, including derivatives and margin trading, only where legal and for eligible users. All content is general information, not financial advice – seek independent advice before trading. Trading cryptocurrencies involves a high level of risk and can lead to a total loss. By using WEEX services, you accept all associated risks and terms. Never invest more than you can afford to lose. Further information can be found in our Terms of Use and in the Risk Disclosure.