Bitcoin Tax Rules in Germany: Holding Periods and Exemptions

The rules for taxing Bitcoin in Germany are complex and often misunderstood by individuals. According to the Federal Fiscal Court, gains from selling Bitcoin after twelve months of holding period are tax-free, but those sold within a year are taxed at up to 45 percent plus the solidarity surcharge.

However, it's not just about the rule itself, but also how it applies to different scenarios. For example, with a savings plan that has multiple deadlines, each individual acquisition is considered separately for tax purposes, and the twelve-month period applies to each instalment, not the entire portfolio.

The consumption order principle also comes into play when selling part of a holding, which means that older coins are used up first. To avoid confusion, it's essential to keep a record of every acquisition, including date, amount, and price.