Austrian Tax Office: Scam Victims May Not Get a Tax Break

Austrian tax law has a peculiar stance on losses due to cryptocurrency scams. If you lose Bitcoin to fraud, it may not be considered a taxable loss in economic terms.

According to Austrian administrative practice, theft of cryptocurrencies, loss through fraud, hacking attacks, and loss of the private key are treated similarly. None of these events generally produce a realized loss for tax purposes when held as private assets.

This is different from a voluntary sale below the original purchase price, which would result in a taxable loss. For example, if you bought Bitcoin for 20,000 euros and later sold it at a loss of 8,000 euros, you could claim that as a tax loss under Austrian law.

However, if your Bitcoin is lost to fraud, the necessary realisation event is generally absent. This means no capital loss can be offset against tax in the same year.