Bitcoin & tax in Germany: holding period, exemption limit, FIFO

The word ‘tax’ makes many people switch off – yet the basic rule is manageable. Whether you pay tax on Bitcoin gains in Germany depends mainly on two questions: how long did you hold the bitcoin, and how much gain did you make in the year? This article covers bitcoin held as private assets.

The basic rule

For tax purposes, Bitcoin is neither money nor a security but an ‘other asset’ (anderes Wirtschaftsgut). Gains from selling it are therefore private disposalsGlossaryPrivate disposal transaction (privates Veräußerungsgeschäft)A German tax term from § 23 EStG: if you sell or swap privately held bitcoin within one year of buying them, the gain is taxable – unless all such gains in that year together stay below the €1,000 exemption limit.In the glossary →× (private Veräußerungsgeschäfte) under § 23 of the Income Tax Act (EStG).^[2],[1] The Federal Fiscal Court (Bundesfinanzhof) confirmed this for Bitcoin in 2023.^[3]

• Buying and holding does not trigger tax. There must always be an acquisition and a disposal.^[2]
• Time decides. If no more than one year lies between purchase and sale, the gain is taxable as soon as the annual total reaches the exemption limit. If more than one year lies in between, it stays tax-free – with no upper limit.^[1]
• Only the gain is taxed: sale price minus acquisition costs minus income-related expenses. Purchase fees count towards the acquisition costs; selling fees are income-related expenses.^[1],[2] The gain counts as ‘other income’ and is taxed at your personal income tax rate.^[7]

The calculation is in euros. Acquisition costs and proceeds go into your records at their euro value, even if you did not trade in euros.^[2] That is why the examples here – unlike elsewhere on this site – are in euros.

1 year

Holding period

tax-free afterwards, with no upper limit

under €1,000

Exemption limit per calendar year

for all private disposal gains

FIFO

Order if in doubt

considered per wallet

The holding period: one year, to the day

The holding periodGlossaryHolding period (speculation period)In Germany, the gain from selling privately held bitcoin is tax-free if more than one year passes between purchase and sale (§ 23 EStG, as of September 2026). Each purchase has its own holding period.In the glossary →× runs separately for each purchase. With a monthly savings planGlossarySavings plan (Bitcoin savings plan)Automatically buying bitcoin at fixed intervals with a fixed amount, for example $50 a month. A savings plan takes the question of the right moment off your hands, but doesn’t promise a higher return.On the learning path: Stage 4 · Step 4 – Setting up a savings plan →In the glossary →×, after one year you have twelve purchases with twelve periods.^[1] What counts are the timestamps recorded by your exchangeTermExchange (crypto exchange)A trading platform where buyers and sellers trade bitcoin with each other via an order book.On the learning path: Stage 4 · Step 2 – Choosing a provider →In the glossary →AdLicensed providers with a paid linkProviders from our comparisonKrakenExchange · MiCA (Central Bank of Ireland)Visit Kraken* (paid link, opens in a new window)BitvavoExchange · MiCA (AFM, Netherlands)Visit Bitvavo* (paid link, opens in a new window)CoinbaseExchange · MiCA (CSSF, Luxembourg)Visit Coinbase* (paid link, opens in a new window)All 7 compared – including non-partners →*Paid link: if you sign up or buy through it, we earn a commission. Your price stays the same. How we make money →18+ · Crypto assets are highly volatile; you could lose all your money. No deposit protection.× or app.^[2]

The period is counted under the Fiscal Code (AO), which refers to the Civil Code (BGB):^[4] the day of purchase does not count. The period ends at the close of the same calendar date in the following year – after a purchase on 29 February, at the close of the last day of February.^[5],[6] Because the law requires ‘more than one year’, a sale only stops being taxable the day after. On the anniversary itself you are still within the period.^[1]

Purchased on	Period ends at close of	Sale no longer taxable from
15 Mar 2025	15 Mar 2026	16 Mar 2026
31 Dec 2025	31 Dec 2026	1 Jan 2027
29 Feb 2024	28 Feb 2025	1 Mar 2025

The exemption limit: why €999.99 and €1,000 are so different

Gains within the holding period stay tax-free if your total gain from all private disposals in a calendar year is below €1,000.^[1] Up to and including 2023, the limit was €600.^[2]

The exemption limitGlossaryExemption limit (€1,000 Freigrenze)In Germany, gains from private disposal transactions stay tax-free if they total less than €1,000 in a calendar year. From €1,000, the entire gain is taxable.In the glossary →× is not an allowance: once it is reached, the entire gain is taxable, not just the part above it.^[1]

Case	Gain from sales within the holding period (annual total)	Taxable?
A	€999.99	no
B	€1,000.00	yes – the full €1,000
C	€1,450.00	yes – the full €1,450
D	€25,000, but sold after more than one year	no – doesn’t count at all

Simplified, with no other private disposals in the same year.

• Everything counts together: gains from gold, for example, go towards the same limit.^[2],[9]
• Married couples: under joint assessment, each spouse with gains of their own has a separate exemption limit.^[8]

Dive deeperWorked example: what a single cent can do

In February you buy 0.05 BTC at a sample price of €60,000 for €3,000 and pay a €15 fee. In October of the same year you sell it all at a sample price of €80,500 for €4,025 and pay a €10 fee.

• Acquisition costs: €3,000 + €15 = €3,015
• Gain: €4,025 − €10 − €3,015 = €1,000.00 – the exemption limit is reached, so all of it is taxable.
• At a selling price of €80,499.80 it would be €999.99 – tax-free.

At an assumed tax rate of 30%, that one cent means around €300 in income tax (simplified, without surcharges).

Which bitcoin did you sell? FIFO per wallet

If you can prove which bitcoin you sold, exactly those count. Otherwise FIFOGlossaryFIFO (first in, first out)A tax ordering rule: in Germany, if you can’t prove which bitcoin you sold, the ones bought first count as sold first for the holding period – assessed per wallet.In the glossary →× (‘first in, first out’) applies for the holding period: the bitcoin bought first are treated as sold first. For the amount of the gain, the average acquisition cost is generally used; as a simplification, you may use FIFO for that too.^[2]

This applies per walletGlossaryWallet (Bitcoin wallet)Software or a device that manages your private keys, generates receiving addresses and signs transactions. The bitcoin itself isn’t in the wallet but on the blockchain – the wallet holds the access to it.On the learning path: Stage 5 · Step 2 – Setting up your first wallet →In the glossary →×: you keep the chosen method there until all the bitcoin in that wallet have been sold.^[2] Note the method in your records.

Example: a savings plan, a partial sale

Your ‘Savings’ wallet holds two purchases (including fees). You use FIFO for the gain as well.

Purchased on	Amount	Acquisition costs	Holding period over on 20 Feb 2026?
10 Jan 2025	0.010 BTC	€900	yes – no longer taxable since 11 Jan 2026
15 Oct 2025	0.010 BTC	€1,050	no – only from 16 Oct 2026

On 20 February 2026 you sell 0.015 BTC at a sample price of €100,000 for €1,500 (no fees):

• 0.010 BTC from the January purchase: €100 gain, but not taxable.
• 0.005 BTC from the October purchase: proceeds €500, proportional costs €525. That is a €25 loss within the holding period, which you can declare.

Change and transfers between your own wallets

• Change: when you pay with bitcoin, a remainder often flows back to one of your own addresses (UTXO modelGlossaryUTXO (Unspent Transaction Output)An output of an earlier transaction that hasn’t been spent yet – like a single banknote in your wallet. Bitcoin has no account balances: your balance is the sum of all the UTXOs you can spend with your keys.On the learning path: Stage 5 · Step 4 – First withdrawal →In the glossary →×). The original acquisition data continue to apply to it.^[2]
• Your own wallets: sending bitcoin from an exchange to your hardware walletTermHardware walletA small dedicated device that keeps your private keys offline and signs transactions internally.On the learning path: Stage 6 · Step 1 – Hardware wallets compared →In the glossary →AdManufacturers with a paid linkProviders from our comparisonBitBox02Hardware wallet · SwitzerlandVisit BitBox* (paid link, opens in a new window)Trezor SafeHardware wallet · Czech RepublicVisit Trezor* (paid link, opens in a new window)Blockstream JadeHardware wallet · Canada/USAVisit Blockstream Jade* (paid link, opens in a new window)All 6 compared – including non-partners →Only buy hardware wallets from the manufacturer or an authorised reseller.*Paid link: if you sign up or buy through it, we earn a commission. Your price stays the same. How we make money →× is not a disposal, because you are not transferring them to a third party in return for payment.^[2] The tax office can, however, ask for documentation of reallocations; we read this as including transfers between your own wallets.^[2] So note the date, amount and transaction ID.

Separate wallets for long-term saving and for spending make it easier to show later which bitcoin have been held for more than a year. How to file your records is covered in Record-keeping & tax tools.

Swapping, paying, gifting: what counts as a sale

A disposal means transferring bitcoin to a third party in return for payment – for euros, for goods and services, or for other crypto assets.^[2] Like any sale, it is only taxable within the holding period.

Transaction	Tax treatment (simplified)
Selling bitcoin for euros	Disposal
Swapping bitcoin for another crypto asset or a stablecoinGlossaryStablecoinA crypto-asset whose value is meant to be pegged to a currency such as the US dollar or the euro. Unlike bitcoin, a stablecoin has an issuer – its value depends on the issuer keeping its reserves and remaining solvent.In the glossary →×	Disposal; a new holding period starts for the new asset
Paying with bitcoin, including by crypto card	Disposal; the price agreed in euros counts as proceeds
Paying with bitcoin via Lightning	Not expressly regulated; the obvious approach is the same treatment as for other payments
Transferring bitcoin to your own wallet	Not a disposal – but document it
Giving bitcoin away	Not a disposal; the recipient takes over your purchase date

• Swapping: the proceeds are the market price of what you receive.^[2] Which price sources are acceptable is explained in Record-keeping & tax tools.
• Paying: in May you buy 50,000 sats (0.0005 BTC) at a sample price of €60,000 for €30, and in August you use them to pay for a €36 dinner. That is a disposal within the holding period with a €6 gain – no problem on its own, but it counts towards the annual total for the exemption limit. With crypto cards, the card statement is usually sufficient as proof.^[2]
• Lightning: the BMF guidance does not mention the Lightning NetworkGlossaryLightning NetworkA second layer on top of Bitcoin for fast, low-cost payments. Amounts move off the blockchain via payment channels; only opening and closing a channel ends up in a block as a normal transaction.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×.^[2] The treatment in the table is our reading of the general rules, not information from the tax authorities.
• Gifting: the holding period continues for the recipient.^[1] Whether gift tax is due is covered in Gifting & inheriting Bitcoin.

Losses: worth declaring

Losses from sales within the holding period can only be offset against gains from private disposals, not against salary, rent or investment income. First in the same year; anything left over reduces such gains in the previous year or in later years.^[1] To do this, declare the loss in your tax return.

Example: a €1,300 gain and a €400 loss within the holding period give a total gain of €900 – below the exemption limit, so tax-free.^[1]

Losses after the holding period has ended do not count for tax purposes, just like gains.^[2]

Special cases: lending, mining, frequent trading

• Lending: the income counts as ‘other income from services’.^[2] It stays tax-free if, together with other such income, it is below €256 a year.^[7] For bitcoin, lending does not extend the holding period to ten years.^[2] Bear in mind, though, that lending means giving up control over your bitcoin.
• Mining: the block reward and transaction fees are income. If mining is set up to be repeated and to make a profit over time, the tax authorities quickly treat it as commercial.^[2] Clarify this with a tax adviser beforehand.
• Frequent buying and selling can count as commercial trading, with different rules.^[2]
• Bitcoin products in a securities account raise their own tax questions – see Bitcoin ETPs in your securities account.

Tax return, reporting and reform

You enter gains and losses from sales within the holding period in your income tax return on form Anlage SO, in the section ‘Private Veräußerungsgeschäfte – Andere Wirtschaftsgüter’ (private disposals – other assets).^[10] Your statements provide the figures. With several providers and wallets, software that collects your purchases and works out holding periods under FIFO can help – you still check the result yourself. Record-keeping & tax tools shows how to file your records and check a report.

Since 2026, crypto providers have been recording customer data and transactions and reporting them every year by 31 July to the Federal Central Tax Office (Bundeszentralamt für Steuern) – for the first time by 31 July 2027.^[11] What is reported is explained in DAC8 & reporting obligations.

On the reform: everything above is current law (as of September 2026). According to analyses by tax law firms, a draft bill from the Federal Ministry of Finance proposes a 25% flat-rate withholding tax (Abgeltungsteuer) plus solidarity surcharge, with no holding period, for crypto assets acquired after 31 December 2026. It has not been passed; the plan is still being agreed within the federal government.^[12],[9] We follow the state of play in our reform tracker. There is no reason to rush because of it.

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