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Tuesday, March 5, 2024

Ministry of Finance removes ten-year retention period extension

Profits from staking and lending no longer have to be held for ten years in Germany in order to be sold tax-free.

  • The Treasury is scrapping the hold period extension for cryptocurrency gains made through staking or lending.
  • The Federal Ministry of Finance announced the decision as part of the FDP’s first blockchain roundtable. The final draft for a tax law for cryptocurrencies will not include the extension of the holding period, it says.
  • With staking and lending, you lock your cryptocurrencies in a network for a period of time and receive rewards, such as new coins.
  • Previously, such profits had to be held for ten years in order to be sold tax-free.
  • In contrast, purchased cryptocurrencies only have a one-year holding period .
  • The basis for this extension was Section 23 Paragraph 1 Sentence 1 No. 2 Sentence 4 EStG. In the wording it said: “In the case of economic goods within the meaning of sentence 1, from the use of which as a source of income, income is generated at least in one calendar year, the period increases to ten years.”

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