Germany Crypto Income Tax Guide 2025

What is Crypto Income in Germany?

Cryptocurrency income in Germany refers to crypto received as payment for work, goods, services, or rewards. German tax law treats crypto income under specific categories (Einkunftsarten) depending on the source and nature of the income.

Types of Crypto Income

• Employment income (Einkünfte aus nichtselbständiger Arbeit): Salary or wages paid in crypto
• Business income (Einkünfte aus Gewerbebetrieb): Crypto from commercial activities
• Self-employment income (Einkünfte aus selbständiger Arbeit): Freelance payments in crypto
• Airdrops: Free token distributions
• Hard forks: New coins from blockchain splits
• Referral bonuses: Exchange referral rewards
• Learn-to-earn: Educational reward programs
• Play-to-earn: Gaming rewards
• Mining rewards: Commercial mining income
• Staking rewards: May be "other income" (Sonstige Einkünfte)

German Tax Law and Crypto Income

Income Tax Act (Einkommensteuergesetz - EStG)

German tax law categorizes income into seven types (Einkunftsarten):

1. § 19 EStG: Employment income (Einkünfte aus nichtselbständiger Arbeit)
2. § 15 EStG: Business income (Einkünfte aus Gewerbebetrieb)
3. § 18 EStG: Self-employment income (Einkünfte aus selbständiger Arbeit)
4. § 22 EStG: Other income (Sonstige Einkünfte) - includes private sales

Key German Tax Principles

• Crypto is property, not currency (per German Ministry of Finance)
• Income taxed at progressive rates (14-45%)
• Private sales tax (§ 23 EStG): Crypto held <1 year and sold = taxable; held ≥1 year = tax-free
• Business income always taxable (no 1-year exemption)
• Market value at receipt determines income amount

Employment Income vs Business Income

Employment Income (§ 19 EStG)

You have employment income if you:

• Receive crypto as an employee
• Work under an employer's direction
• Have an employment contract

Tax treatment:

• Report on Anlage N (Einkünfte aus nichtselbständiger Arbeit)
• Subject to income tax (14-45%)
• Subject to social security contributions (health, pension, unemployment, care insurance)
• Employer withholds tax via Lohnsteuer (wage tax)
• May receive Lohnsteuerbescheinigung (wage tax certificate)

Business Income (§ 15 EStG)

You have business income if you:

• Carry on a commercial trade or business (Gewerbebetrieb)
• Regularly buy and sell crypto for profit
• Mine crypto commercially
• Operate a crypto-related business

Tax treatment:

• Report on Anlage G (Einkünfte aus Gewerbebetrieb)
• Subject to income tax (14-45%)
• Subject to trade tax (Gewerbesteuer) - ~3.5% after allowances
• Can deduct business expenses (Betriebsausgaben)
• Must register business (Gewerbeanmeldung)

Self-Employment Income (§ 18 EStG)

You have self-employment income if you:

• Provide freelance services (Freiberufler)
• Work independently without commercial character
• Examples: programmers, consultants, designers

Tax treatment:

• Report on Anlage S (Einkünfte aus selbständiger Arbeit)
• Subject to income tax (14-45%)
• NOT subject to trade tax
• Can deduct business expenses
• Social contributions (health, pension) paid privately

When is Crypto Income Taxable?

Cryptocurrency income is taxable in the year it is received. The taxable amount is the market value in EUR at the time of receipt.

Receipt Date (Zuflusszeitpunkt)

How to Calculate Income Value

Market Value in EUR

Use the market value in EUR at the time of receipt:

• German exchange: Price from a German or European exchange (Kraken, Bitstamp, Binance)
• International exchange: Convert USD to EUR using ECB reference rate
• Consistent method: Use the same valuation method throughout
• Reasonable valuation: Tax authorities accept reasonable methods

Example Calculation

Scenario: You complete a freelance project and receive 2 ETH on 15 March 2025. ETH is trading at €3,000 at the time.

• Amount received: 2 ETH
• Market value: €3,000 per ETH
• Taxable income: 2 × €3,000 = €6,000
• Acquisition cost: €6,000 (for future disposal)

Income Tax Rates in Germany

Progressive Income Tax (2024)

Additional Taxes

Solidarity Surcharge (Solidaritätszuschlag)

• Rate: 5.5% of income tax
• Exemption: Low and middle incomes mostly exempt (since 2021)
• Applies: Only if income tax > €18,130 (single) or €36,260 (married)

Church Tax (Kirchensteuer)

• Rate: 8% (Bavaria, Baden-Württemberg) or 9% (other states) of income tax
• Applies: Only if you're a registered member of a church
• Optional: Can formally leave church to avoid

Total Tax Burden Example

Scenario: Single person, €80,000 taxable income, church member in Berlin.

• Income tax: ~€21,500
• Solidarity surcharge: ~€400
• Church tax (9%): ~€1,935
• Total: ~€23,835 (~30% effective rate)

Social Security Contributions

Employees (§ 19 EStG)

If you receive crypto as an employee:

• Health insurance: ~14.6% (split 50/50 with employer)
• Pension insurance: 18.6% (split 50/50)
• Unemployment insurance: 2.6% (split 50/50)
• Care insurance: ~3.4% (split 50/50)
• Total employee portion: ~20%

Self-Employed (§ 15/18 EStG)

If you're self-employed:

• Health insurance: ~14-16% (voluntary statutory or private)
• Pension insurance: Voluntary (recommended)
• Care insurance: ~3.4%
• No unemployment insurance

Hard Forks and Airdrops

German Tax Treatment

The German Ministry of Finance hasn't issued specific guidance, but general principles apply:

Promotional Airdrops (No Service)

• Not immediate income (no service provided)
• Acquisition cost = €0
• When disposed <1 year: Entire proceeds taxable as private sale (§ 23 EStG)
• When disposed ≥1 year: Tax-free

Bounty/Service Airdrops

• Income when received (service provided = barter transaction)
• Market value = taxable income
• Acquisition cost = market value
• Report as "other income" (Sonstige Einkünfte) or business income

Hard Forks

When you receive coins from a hard fork:

• Conservative view: Income when received (market value)
• Alternative view: No income until disposed (acquisition cost €0)
• Uncertain: No official guidance - consult a tax advisor

Example: Airdrop

Promotional airdrop: You receive 1,000 tokens worth €300. No service required.

• Income at receipt: €0 (no service)
• Acquisition cost: €0
• If sold 6 months later for €500: €500 taxable as private sale (§ 23 EStG)
• If sold 13 months later: Tax-free (held ≥1 year)

Bounty airdrop: You receive 1,000 tokens worth €300 for completing social media tasks.

• Income at receipt: €300 (service provided)
• Acquisition cost: €300
• If sold later for €500: €200 taxable (proceeds - acquisition cost)

Crypto Salary and Employment Income

Receiving Salary in Crypto

If your employer pays you in cryptocurrency:

• Treated as employment income (§ 19 EStG)
• Subject to wage tax (Lohnsteuer)
• Subject to social security contributions
• Employer must value in EUR and withhold taxes
• Report on Anlage N

Employer Obligations

• Calculate EUR value at payment date
• Withhold wage tax (Lohnsteuer)
• Pay social security contributions
• Issue wage tax certificate (Lohnsteuerbescheinigung)
• Report to tax authorities (Finanzamt)

Example: Annual Salary

Your employer pays you €70,000 annual salary, 30% in Bitcoin.

• Cash portion: €49,000
• BTC portion: €21,000 (valued each pay period)
• Total gross: €70,000
• Income tax: ~€15,000 (after allowances)
• Social contributions: ~€14,000 (employee portion)
• Net income: ~€41,000

Self-Employment and Business Income

Freelancers (Freiberufler - § 18 EStG)

If you're a freelancer receiving crypto payments:

• Report on Anlage S
• Subject to income tax (14-45%)
• NOT subject to trade tax
• Can deduct business expenses
• Social contributions paid privately

Business Owners (Gewerbetreibende - § 15 EStG)

If you run a crypto business:

• Report on Anlage G
• Subject to income tax and trade tax
• Must register business (Gewerbeanmeldung)
• Can deduct business expenses
• May need to file VAT returns (Umsatzsteuer)

Allowable Business Expenses (Betriebsausgaben)

• Office equipment and computers
• Software and subscriptions
• Home office expenses (if eligible)
• Internet and phone (business portion)
• Professional services (Steuerberater, lawyer)
• Transaction and exchange fees
• Marketing and advertising
• Vehicle expenses (business use)
• Depreciation (AfA - Absetzung für Abnutzung)

Example: Freelance Developer

Self-employed software developer earning €95,000 in crypto.

• Gross income: €95,000
• Business expenses: €20,000
• Net profit: €75,000
• Income tax: ~€19,000
• Solidarity surcharge: ~€200
• Social contributions: ~€13,000 (health, care)
• Total deductions: ~€32,200
• Net income: ~€42,800

Learn-to-Earn Programs

Coinbase Earn and Similar

Learn-to-earn programs reward users for watching videos and answering questions:

• Coinbase Earn
• Binance Learn & Earn
• CMC Earn

Tax Treatment

Since you perform tasks to receive crypto:

• Likely "other income" (Sonstige Einkünfte - § 22 EStG)
• Taxable at market value when received
• Report on Anlage SO (Sonstige Einkünfte)
• Subject to income tax
• Acquisition cost = market value

Exemption Limit

Other income (§ 22 EStG) has an exemption:

• First €256/year is tax-free (across all "other income")
• Above €256: Fully taxable

Example: Coinbase Earn

You complete 5 Coinbase Earn lessons in 2024:

€24 is below €256 exemption, so no tax owed. Still report on Anlage SO.

Play-to-Earn Gaming

What is Play-to-Earn?

Play-to-earn games reward players with cryptocurrency:

• Axie Infinity: Earn SLP and AXS
• Decentraland: Earn MANA
• The Sandbox: Earn SAND
• Gods Unchained: Earn GODS and NFT cards

Tax Treatment

Casual Players

• "Other income" (Sonstige Einkünfte - § 22 EStG)
• €256 exemption applies
• Report on Anlage SO
• Subject to income tax if over €256

Professional/Business Players

• Business income (§ 15 EStG) if systematic and profit-seeking
• Report on Anlage G
• Subject to income tax + trade tax
• Can deduct expenses
• Must register business

Example: Axie Infinity

Casual player: You play occasionally and earn €400 in SLP.

• "Other income": €400
• Exemption: €256
• Taxable: €144
• Tax (20% rate): ~€29

Professional player: You play daily and earn €30,000.

• Business income: €30,000
• Expenses: €4,000 (Axies, equipment)
• Net profit: €26,000
• Subject to income tax + trade tax

Referral Bonuses and Promotional Rewards

Exchange Referral Programs

Many exchanges offer crypto for referring new users:

• Coinbase referrals
• Binance referral commissions
• Kraken referral bonuses

Tax Treatment

• "Other income" (§ 22 EStG) for casual referrals
• Business income (§ 15 EStG) if systematic referral business
• €256 exemption applies to "other income"
• Report on Anlage SO or Anlage G

How to Report on Tax Return

Anlage N (Employment Income)

For crypto received as an employee:

• Use data from Lohnsteuerbescheinigung (wage tax certificate)
• Enter gross salary (includes crypto value)
• Enter wage tax withheld
• Social contributions are pre-filled

Anlage S (Self-Employment Income)

For freelancers (Freiberufler):

• Enter gross income (all crypto received, valued in EUR)
• Deduct business expenses (Betriebsausgaben)
• Calculate net profit
• Transfer to main tax return

Anlage G (Business Income)

For business owners (Gewerbetreibende):

• Enter business income and expenses
• Calculate profit
• Trade tax assessment will follow

Anlage SO (Other Income)

For miscellaneous income (airdrops, learn-to-earn, referrals):

• Enter type: "Sonstige Einkünfte"
• Describe: "Kryptowährungseinkommen" or specific (airdrops, etc.)
• Enter total EUR value
• Apply €256 exemption automatically

Acquisition Cost After Receiving Income

When you receive crypto as income, your acquisition cost (Anschaffungskosten) equals the market value at receipt. This prevents double taxation.

Example: Complete Tax Cycle

Step 1: Receive Income

• 1 March 2025: Receive 1.5 ETH as payment, ETH = €3,200
• Income: 1.5 × €3,200 = €4,800
• Acquisition cost: €4,800 (or €3,200/ETH)

Step 2: Sell Later

• 1 September 2025 (6 months later): Sell 1.5 ETH when ETH = €3,600
• Proceeds: 1.5 × €3,600 = €5,400
• Acquisition cost: €4,800
• Gain: €5,400 - €4,800 = €600
• Taxable: €600 as private sale (§ 23 EStG) - held <1 year

Example Scenarios with Calculations

Scenario 1: Crypto Salary Employee

You work for a company earning €60,000/year, 25% in Bitcoin.

• Cash salary: €45,000
• BTC salary: €15,000
• Total gross: €60,000
• Income tax: ~€11,500
• Solidarity surcharge: €0 (below threshold)
• Social contributions: ~€12,000 (employee portion)
• Net income: ~€36,500

Scenario 2: Freelance Blockchain Consultant

Self-employed consultant earning €110,000 in crypto.

• Gross income: €110,000
• Business expenses: €25,000
• Net profit: €85,000
• Income tax: ~€23,000
• Solidarity surcharge: ~€500
• Social contributions: ~€15,000
• Total deductions: ~€38,500
• Net income: ~€46,500

Scenario 3: Mixed Crypto Income

You have multiple income sources in 2024:

Record Keeping Requirements

German Tax Law (AO - Abgabenordnung)

You must keep records for 10 years for business income, 6 years for other income.

What to Track

• Date and time of receipt
• Type of income (employment, business, other)
• Amount in crypto
• Market value in EUR at receipt
• Source (employer, client, protocol, exchange)
• Purpose (service provided, employment, etc.)
• Wallet addresses and transaction IDs
• Exchange rates used

Documentation to Keep

• Lohnsteuerbescheinigung (wage tax certificate)
• Invoices and contracts (Rechnungen, Verträge)
• Wallet transaction history
• Exchange statements
• Screenshots of airdrops, earn programs
• Price data sources
• Business expense receipts (Belege)

Tools for Tracking

• Koinly - Excellent German tax support
• CoinTracker - Good income tracking
• CryptoTaxCalculator - German-compliant
• TokenTax - Complex scenarios
• Accointing: Germany-focused crypto tax tool

Common Mistakes to Avoid

1. Confusing income with capital gains: Income is taxed when received, not sold
2. Not reporting small amounts: All income over €256 (for other income) must be reported
3. Wrong form: Use Anlage N (employment), S (freelance), G (business), or SO (other)
4. Forgetting acquisition cost: Cost = market value at receipt
5. Not registering business: Regular crypto activity may require Gewerbeanmeldung
6. Ignoring trade tax: Business income (Anlage G) is subject to Gewerbesteuer
7. Not keeping records for 6-10 years: Tax authorities can audit
8. Using wrong exchange rate: Use EUR value at time of receipt
9. Not claiming business expenses: Deductions reduce taxable income
10. Assuming all airdrops are tax-free: Service airdrops are taxable income

FAQs

Is all crypto income taxable in Germany?

Yes. Cryptocurrency received as payment, salary, or reward is taxable income at full progressive rates (14-45%).

Do I pay income tax or capital gains tax on crypto?

Income tax when you receive crypto as income (full rates). Private sale tax (§ 23 EStG) if you sell crypto held <1 year (also full rates); tax-free if held ≥1 year.

Are airdrops taxable in Germany?

Service/bounty airdrops are taxable income. Promotional airdrops (no service) are not immediate income but have €0 acquisition cost (tax when sold if held <1 year).

What is the €256 exemption?

"Other income" (Sonstige Einkünfte - § 22 EStG) under €256/year is tax-free. Applies to learn-to-earn, casual play-to-earn, referrals, etc.

Do I need to register a business (Gewerbe)?

If you regularly trade crypto for profit or run a crypto-related business, yes. Freelancers (Freiberufler) providing services generally don't need Gewerbe registration.

Can I offset crypto losses against income?

Capital losses (from selling crypto) can only offset capital gains or private sale income (§ 23 EStG). Business losses can reduce business income.

What if I don't report crypto income?

Tax evasion (Steuerhinterziehung) is a criminal offense in Germany. Penalties include fines and potential imprisonment. German exchanges may report to tax authorities.

How do I value crypto with no EUR market?

Convert from USD to EUR using ECB reference rate or use a reasonable method and document it consistently.

What about staking rewards?

No official guidance. Conservative approach: "other income" (§ 22 EStG) when received. Some tax advisors argue it could be held under private sale rules with 1-year exemption. Consult a Steuerberater.

Can my employer pay me entirely in crypto?

Yes, but they must value it in EUR, withhold wage tax (Lohnsteuer) and social contributions, and meet all employment law requirements.

Tools & Resources

Crypto Tax Software

• Koinly - Excellent German tax support
• CryptoTaxCalculator - Good for Germany
• Accointing: German-focused crypto tax platform
• CoinTracker - Income tracking
• TokenTax - Complex scenarios

German Tax Resources

• Bundesministerium der Finanzen (BMF)
• Einkommensteuergesetz (EStG)
• Find a Steuerberater: Search for crypto-specialized tax advisors

Final Thoughts

Cryptocurrency income in Germany is taxed under specific income categories (Einkunftsarten) at progressive rates (14-45%) plus potential solidarity surcharge and church tax. Understanding whether your income is employment (Anlage N), self-employment (Anlage S), business (Anlage G), or other (Anlage SO) is critical.

Key principles:

• Income taxed when received at market value
• Acquisition cost = market value (prevents double tax)
• €256 exemption for "other income"
• 1-year holding period for tax-free private sales (but not for income)
• Business expenses are deductible
• Keep records for 6-10 years

Given Germany's complex tax system, most crypto earners will benefit from using specialized crypto tax software like Koinly and consulting a Steuerberater (tax advisor) with cryptocurrency expertise, especially for business income or complex situations.