Tax-free after one year
In Germany, if you hold Bitcoin for at least 12 months before selling or using it, any profit is completely tax-free. This makes long-term holding very attractive for investors.
Short-term sales are taxable
If you sell Bitcoin within less than 12 months after buying it, the profit is taxable as private income. You must declare it in your tax return, and it may increase your personal tax rate.
Small profits are exempt
If your total profit from private sales (including Bitcoin and other goods) is under €600 per year, you don’t have to pay tax on it — even if you sold within a year.
Different rules in other countries
Many countries, like the U.S. or France, do not offer a 1-year exemption. There, any Bitcoin sale is generally taxable, no matter how long you held it. Germany’s rule is quite special in this regard.
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