Germany Crypto Staking Tax Guide 2025

What is Crypto Staking?

Crypto staking involves locking cryptocurrency to support blockchain networks in exchange for rewards:

• Ethereum (ETH): Solo or pooled staking
• Cardano (ADA): Delegation
• Polkadot (DOT): Nominating
• German exchanges: Binance, Kraken, Coinbase

German Finanzamt Treatment

Germany treats staking differently from regular crypto trading due to a landmark 2021 BMF letter:

The 10-Year Rule (§ 23 EStG)

"Staking and lending activities extend the holding period for tax-free treatment from 1 year to 10 years." - BMF Letter, May 2022

What this means:

• Regular crypto: Tax-free after 1 year
• Staked crypto: Tax-free after 10 years
• Applies to: Both the original stake AND rewards

Two Tax Events

1. Income tax: When you receive rewards (other income)
2. Private sales tax: When you sell (if within 10 years)

When Are Rewards Taxable?

Staking rewards are other income (sonstige Einkünfte) when received:

• Taxable date: When credited to your control
• FMV: EUR value at time of receipt
• Tax rate: Progressive income tax rate (14-45% plus Solidarity surcharge)

Income Tax on Staking Rewards

Tax Rates (2025)

€256 Other Income Allowance

You have a €256 annual allowance for "other income" (includes staking, mining, airdrops, etc.):

• First €256 of other income = tax-free
• Applies to all sources of other income combined
• Above €256 = fully taxable at marginal rate

The 10-Year Holding Period

How It Works

When you stake crypto, the holding period extends to 10 years for both:

1. Original staked amount: The crypto you initially staked
2. Staking rewards: The rewards you receive

Example

Scenario: You buy 10 ETH on Jan 1, 2025 and immediately stake them.

• Without staking: Tax-free to sell after Jan 1, 2026 (1 year)
• With staking: Tax-free to sell after Jan 1, 2035 (10 years)

Rewards received:

• Receive 0.4 ETH rewards on July 1, 2025
• Income tax due on €1,200 value (at receipt)
• Tax-free to sell after July 1, 2035 (10 years from receipt)

Implications

• Long-term holding required: 10 years for tax-free treatment
• Short-term sales taxed: Any sale within 10 years = private sales tax
• Exemption limit: €600 annual exemption for private sales

Private Sales Tax (When You Sell)

€600 Annual Exemption

If you sell staked crypto within 10 years:

• Total gains < €600/year: Tax-free
• Total gains ≥ €600/year: Fully taxable at marginal rate
• All-or-nothing: €599 = €0 tax, €600 = full taxation

Calculation

Example:

• Receive 0.1 ETH as reward when ETH = €3,000 (income = €300)
• Sell 0.1 ETH after 2 years when ETH = €4,000
• Sale proceeds = €400
• Cost basis = €300 (income value)
• Private sale gain = €400 - €300 = €100
• If total private sales gains < €600: Tax-free
• If total ≥ €600: €100 taxed at marginal rate

How to Report to Finanzamt

Income Tax Return (Einkommensteuererklärung)

1. Anlage SO (Other Income): Report staking rewards
2. Line 8-11: Sonstige Einkünfte (Other Income)
3. Description: "Einkünfte aus Staking von Kryptowährungen"
4. Amount: Total EUR value of rewards received

Private Sales (When Selling)

1. Anlage SO: Private Veräußerungsgeschäfte (Private sales)
2. Report sales within 10-year period
3. Apply €600 exemption if applicable

Example Scenarios

Scenario 1: Kraken Staking (Small Amount)

Stake 5 ETH at 4% APY:

• Annual rewards: 0.2 ETH
• Average price: €3,000
• Income: €600
• Tax: €600 - €256 allowance = €344 taxable
• Holding period: 10 years for tax-free sale

Scenario 2: ETH Solo Validator

Run validator with 32 ETH:

• Annual rewards: ~1.2 ETH
• Income: ~€3,600 (at €3,000 avg)
• Tax: €3,600 - €256 = €3,344 at marginal rate (~€1,400-€1,600 tax)
• 10-year holding: Both original 32 ETH and all rewards

Strategy Considerations

Should You Stake in Germany?

Pros:

• €256 other income allowance
• €600 private sales exemption
• After 10 years = completely tax-free

Cons:

• 10-year holding requirement is very long
• Short-term sales heavily taxed
• Income tax on rewards (14-47.48%)

Alternatives

• Don't stake: Keep 1-year holding period
• Long-term hold: Stake only if planning 10+ year hold
• Small amounts: Stay under €256 allowance

Record Keeping

Keep records for potential Finanzamt audit:

• Date and time of each reward
• Amount in crypto
• EUR value at receipt
• Purchase date of original stake
• Wallet/exchange information

Recommended Tools

• Koinly - German tax support
• CoinTracker - Multi-country

Common Mistakes

1. Assuming 1-year rule: Staking extends to 10 years
2. Not reporting rewards as income: Must report at receipt
3. Selling within 10 years: Triggers private sales tax
4. Exceeding €600 exemption: All gains become taxable
5. Forgetting €256 allowance: First €256 of other income tax-free

FAQs

Why 10 years instead of 1 year?

The BMF (Federal Ministry of Finance) ruled that staking generates income from the crypto (like rental income from real estate), extending the holding period under § 23 EStG.

Does the 10-year rule apply to all staking?

Yes, including exchange staking, solo staking, and liquid staking (stETH, rETH).

What if I unstake before selling?

Unstaking doesn't reset the clock. The 10-year period starts from initial staking date.

Can I stake a small amount to avoid the 10-year rule?

No. Any amount of staking triggers the 10-year holding period for the staked crypto.

Is there any way around the 10-year rule?

Not legally. You can either:

• Don't stake (keep 1-year rule)
• Stake and hold 10 years
• Stake and sell within €600 exemption limit

Finanzamt Resources

• BMF Letter on Crypto Taxation (May 2022)

Final Thoughts

Germany's 10-year staking rule is unique and significantly impacts staking strategy. The €256 other income allowance and €600 private sales exemption provide some relief for small-scale stakers, but the extended holding period makes staking less attractive than in other countries.

For German crypto investors, the decision to stake should factor in whether you're willing to hold for 10 years. Otherwise, the 1-year tax-free rule for regular (unstaked) crypto may be more beneficial.