Law & Taxes
Stay legal. Stay informed.
Understand the legal status of Bitcoin, tax rules, and regulatory basics.
In most countries: Yes
Bitcoin is legal to own, buy, and use in most countries around the world. It is treated as a private digital asset, not as a national currency. You can hold it, send it, and receive it freely — just like gold or art.
What’s not legal?
Some activities involving Bitcoin can be illegal, depending on how you use it. For example, using Bitcoin for money laundering, tax evasion, or to finance crime is against the law — just like with cash.
Banking laws and regulations
In some countries, using Bitcoin may be limited by financial regulations. Banks may refuse to work with crypto platforms, and some services may require ID verification due to anti-money laundering (AML) laws.
Always check your local rules
Laws differ by country. While Bitcoin is legal in most of Europe, the U.S., and Japan, some countries have bans or restrictions. It's a good idea to stay informed about your local legal environment.
Owning Bitcoin is not taxable
Just holding Bitcoin is usually not a taxable event. You don’t need to report anything if you simply bought Bitcoin and are still holding it without selling or using it.
When do taxes apply?
You may need to declare Bitcoin if you:
- Sell it for fiat money (like euros or dollars)
- Exchange it for another cryptocurrency
- Use it to pay for goods or services
Keep records
It’s important to document when you bought your Bitcoin, how much you paid, and when/how you used or sold it. This helps calculate gains or losses correctly for tax purposes.
Rules vary by country
Tax laws are different everywhere. In some places, small gains or long-term holdings may be tax-free. In others, any crypto sale must be declared. Check with a tax advisor familiar with crypto.
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.
