Germany's Private Bitcoin Sales Tax: A One-Year Holding Period Rule
The tax implications of selling Bitcoin privately in Germany depend on how long you've held onto your coins.
According to Section 23 of the German Income Tax Act, if you sell within a year of purchasing, the gain is taxable. The threshold for this rule is €1,000 per calendar year, which means that any gains below this amount are tax-free, while exceeding it makes the entire gain taxable.
However, if you've held onto your coins for longer than a year, the gain on sale is entirely tax-free, regardless of its size. This one-year holding period is the most effective lever a private investor has under German tax law.
To calculate the taxable gain, you need to subtract the acquisition cost and associated expenses from the sale price. For example, if you purchased 0.2 BTC for €16,000 in March and sold it privately for €19,000 in September, your disposal gain would be €2,908, which is taxable since less than a year separated purchase from sale and the threshold has been exceeded.