Germany's Tax Ruling on Cryptocurrency Losses Leaves Share Gains Intact

In Germany, losses from selling cryptocurrencies cannot be offset against gains from shares due to their separate tax categories. The Income Tax Act keeps these loss buckets strictly apart, but there is an exception for crypto derivatives that fall under the same provision as share gains.

Crypto assets held as private assets and sold within a year are considered private disposal transactions under section 23 EStG, with gains taxed at personal income tax rates. Shares, on the other hand, run through section 20 EStG, with a separate tax rate of 25% applying plus solidarity surcharge and church tax.

Losses from private disposal transactions can be offset against gains from the same category within the calendar year, but only up to the amount of gain made in that year. This means a crypto loss can neutralize a gold sale gain but not touch dividend or capital gain from share portfolio.