Germany's Crypto Tax Draft Sparks Controversy Over Acquisition Costs

Germany's draft bill on crypto taxation has sparked controversy over how to calculate acquisition costs for cryptocurrencies received as salary, rent, or fees. According to Dr. Ingo Heuel, a tax adviser at the LHP Gruppe, the current draft could lead to double taxation if the acquisition costs are set to zero euros.

Heuel's example involves an employee receiving 50,000 euros in Bitcoin as salary in 2027, which is taxed as employment income. If the employee later sells the coins at a profit, the original 50,000 euros would be taken into account as acquisition costs, resulting in a tax of 2,500 euros on the sale. However, if the acquisition costs are set to zero, the entire proceeds of 60,000 euros would be taxed, resulting in a higher tax bill of 15,000 euros.

The rule is intended to apply to gifted tokens and airdrops, but Heuel argues that it could also affect employees who receive wages in crypto assets and hold them privately. This gap has been documented, but its implications are still unclear, as the draft bill needs to pass through several stages before becoming law.