Crypto tax law in Germany. How does it work?

[WeThePe0ple]

I just read that short term crypto profits in Germany are taxed like elsewhere in Europe, between 40 and 50%.
But if you have held crypto for 1 year, taking profits is tax free.

Can anyone explain this in detail? I live in Belgium now, about an hour away from the German border.
Do I have to rent a place in Germany to be subjected to this law? Or do I have to be a German citizen?

My own country will take about 60% of all profits with various kinds of taxes. Of course I am not going to do this.

[1714572927]

1714572927

[1714572927]

1714572927

[1714572927]

1714572927

[1714572927]

1714572927

[1714572927]

1714572927

[AHOYBRAUSE]

I just read that short term crypto profits in Germany are taxed like elsewhere in Europe, between 40 and 50%.
But if you have held crypto for 1 year, taking profits is tax free.

Can anyone explain this in detail? I live in Belgium now, about an hour away from the German border.
Do I have to rent a place in Germany to be subjected to this law? Or do I have to be a German citizen?

My own country will take about 60% of all profits with various kinds of taxes. Of course I am not going to do this.

Normally to be subject to laws like this you need to have a residency in Germany, otherwise that wouldn't make sense.
That's all about the law I know, even though I am German.
Laws like this, same for stock investments and so on are so ridiculous in my eyes. You have to pay for wins but losses (of course) can't be deducted. So it's a win-win for the government. But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

[Poker Player]

But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

The bolded part cannot be so because by simple compound interest there could be no winning poker players, and Germany has produced a very good number of them. I think you are confusing the tax that is applied to pots or buy-ins with the tax that is applied to profits, to which income tax is applied.

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

[AHOYBRAUSE]

But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

The bolded part cannot be so because by simple compound interest there could be no winning poker players, and Germany has produced a very good number of them. I think you are confusing the tax that is applied to pots or buy-ins with the tax that is applied to profits, to which income tax is applied.

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

Betting on sports in Germany the 5% tax has to be paid while making the bet. It doesn’t matter if the bet wins or loses, when you bet 100€ the amount shown on your betting slip will be 95€ since the tax is deducted immediately . About poker you are right.

About the residency, if you have a residency ( rented house or whatever in your name which is registered ) there is some tax you will pay , not only if you stay in Germany longer than 183 days. The 183 rule is for income tax. Gains from investments fall under a different tax as far as I know . This tax is called Abgeltungssteuer.

[zasad@]

But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

The bolded part cannot be so because by simple compound interest there could be no winning poker players, and Germany has produced a very good number of them. I think you are confusing the tax that is applied to pots or buy-ins with the tax that is applied to profits, to which income tax is applied.

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

Betting on sports in Germany the 5% tax has to be paid while making the bet. It doesn’t matter if the bet wins or loses, when you bet 100€ the amount shown on your betting slip will be 95€ since the tax is deducted immediately . About poker you are right.

About the residency, if you have a residency ( rented house or whatever in your name which is registered ) there is some tax you will pay , not only if you stay in Germany longer than 183 days. The 183 rule is for income tax. Gains from investments fall under a different tax as far as I know . This tax is called Abgeltungssteuer.

I don't know anything about taxes on cryptocurrencies in Germany, but I want to draw your attention to one very important point: 183 days.
From the experience of my friends, this does not work automatically. If, by law, you are not a tax agent of your country because you live in another country, then you must first deregister from the tax register in your country and then register with the tax office of another country.

[WeThePe0ple]

But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

The bolded part cannot be so because by simple compound interest there could be no winning poker players, and Germany has produced a very good number of them. I think you are confusing the tax that is applied to pots or buy-ins with the tax that is applied to profits, to which income tax is applied.

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

Someone I know has more experience in crypto and knows a way to cash out money without it passing through a regular bank. It's cash money though. I would allow for roughly 290€ per day to be withdrawn without a tax agent or bank knowing about it. With the current kind of taxation I'm not going to cash out via any regular bank.

In a different topic I asked which coins outperform BTC during a market crash, because I considered converting BTC to such an altcoin instead of cashing out. I also believe that stablecoins are not safe because of threatening regulation (risk of losing the peg).
I'm looking into it whether it makes sense to convert profits to XRP. Surely there would be a risk of XRP crashing 30%, 50% or more. But there's also a chance of XRP going to the moon. If XRP has 1/3 chance of increasing in value, 1/3 of remaining more or less stable, and 1/3 chance of crashing (30%-50%) curing a bear market, I think that such a conversion is a better option than just paying taxes and having a 100% certainty that the profits are gone.

But if anyone feels differently about it, please tell me.

[zasad@]

But hey, in a country that even taxes every sports bet or poker hand you are playing (every time 5% of the amount bet or won), what else would you expect, right.

The bolded part cannot be so because by simple compound interest there could be no winning poker players, and Germany has produced a very good number of them. I think you are confusing the tax that is applied to pots or buy-ins with the tax that is applied to profits, to which income tax is applied.

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

Someone I know has more experience in crypto and knows a way to cash out money without it passing through a regular bank. It's cash money though. I would allow for roughly 290€ per day to be withdrawn without a tax agent or bank knowing about it. With the current kind of taxation I'm not going to cash out via any regular bank.

In a different topic I asked which coins outperform BTC during a market crash, because I considered converting BTC to such an altcoin instead of cashing out. I also believe that stablecoins are not safe because of threatening regulation (risk of losing the peg).
I'm looking into it whether it makes sense to convert profits to XRP. Surely there would be a risk of XRP crashing 30%, 50% or more. But there's also a chance of XRP going to the moon. If XRP has 1/3 chance of increasing in value, 1/3 of remaining more or less stable, and 1/3 chance of crashing (30%-50%) curing a bear market, I think that such a conversion is a better option than just paying taxes and having a 100% certainty that the profits are gone.

But if anyone feels differently about it, please tell me.

The best stablecoin is cash.
If you want to rebalance one coin to another, given the impossibility of exchanging cryptocurrencies for cash, then I would buy large ecosystem projects, such as Ethereum or Polkadot.
Look at the statistics on the number of developers in projects, maybe this will help you find other options
https://www.developerreport.com/

[darkangel11]

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

It's not that easy to be honest. Many countries in the EU will treat you like subject to their local tax laws unless you prove to them that you're no longer their tax resident and a tax resident is different from a normal resident. You can live somewhere but that doesn't change your residency. To change residency you have to first have registration of residence, or "Anmeldung" is how they call it in Germany. That just proves that you live there and you can start counting your residency from that point. Then you can apply for permanent residence, but residence does not mean tax residence because remember that you're still a citizen of one country, but a resident of another, so you're still on the list of taxpayers in the country from which you've migrated. You have to tell them that you no longer live there and they will most likely check everything thoroughly, because they don't want you to cheat. Remember that you're a money making machine for them. By law most countries will not change your tax residency if you don't live abroad for more than 6 months a year. I also heard that they will deny your request if your wife and children did not move out with you.

[zasad@]

As for the tax residency in Germany that the OP asks, it is the same as in other countries in Europe: you have to spend a minimum of 6 months living there.

This for people who are in the same case as the OP, living very close to a country with a better tax treatment, it is very tempting to rent a house to claim tax residency but without actually spending the required time. To this I have to warn that the tax authorities of the countries have become more and more sophisticated and can analyze things like electricity consumption or credit card payments and if you have not spent the minimum time you are going to have a problem.

It's not that easy to be honest. Many countries in the EU will treat you like subject to their local tax laws unless you prove to them that you're no longer their tax resident and a tax resident is different from a normal resident. You can live somewhere but that doesn't change your residency. To change residency you have to first have registration of residence, or "Anmeldung" is how they call it in Germany. That just proves that you live there and you can start counting your residency from that point. Then you can apply for permanent residence, but residence does not mean tax residence because remember that you're still a citizen of one country, but a resident of another, so you're still on the list of taxpayers in the country from which you've migrated. You have to tell them that you no longer live there and they will most likely check everything thoroughly, because they don't want you to cheat. Remember that you're a money making machine for them. By law most countries will not change your tax residency if you don't live abroad for more than 6 months a year. I also heard that they will deny your request if your wife and children did not move out with you.

This is a general question and depends on double taxation laws between countries. The very fact that a person has lived in another country for 6 months or more does not make him a tax resident. This means studying international legislation or seeking help from lawyers who will advise on the best options, including opening companies in other jurisdictions.