Austrian Tax Authorities Crack Down on Cryptocurrency Mining Rewards

In Austria, cryptocurrency mining is subject to taxation when rewards are received. According to tax law, income from mining is considered current income from cryptocurrencies and is taxed at a special rate of 27.5 percent.

This rate applies as long as the mining activity remains within private asset management for tax purposes. However, if the mining grows into a commercial business by its nature and scale, different rules apply.

The value of the mining rewards is determined at the time they are received, and this value forms the acquisition cost of the Bitcoin for tax purposes. For example, if 1,000 euros' worth of BTC is received as a reward, it would be taxed as current crypto income, and the acquisition cost would also be 1,000 euros.

If the value of the BTC increases to 1,500 euros and they are later sold, a further capital gain of 500 euros can arise. In contrast, if the mining becomes a commercial business, the progressive income tax rate can apply, and costs such as hardware, electricity, or depreciation may be treated differently.

The Austrian Ministry of Finance emphasizes that there is no simple statutory threshold for determining when an activity becomes a commercial business. Rather, it depends on the overall picture, including factors like scale, organisation, and professional activity.