Germany News

Germany, officially the Federal Republic of Germany, is a country in central-western Europe. Germany is a powerful country with a strong economy that is fourth in the world by nominal gross domestic product, or GDP. Germany has an evolving regulatory setup for crypto businesses overseen by Germany’s Federal Financial Supervisory Authority (BaFin). Assessment depends on the nature of tokens and involves laws like the German Securities Trading Act and MiFID 2 for financial instruments.

Section 1 (11) sentence 5 of the German Banking Act excludes certain items from being considered crypto assets, such as electronic money, limited network payment systems, specific electronic vouchers, and non-tradable electronic tokens in multipartner programs.

Germany is considered crypto-friendly and treats cryptocurrencies like Bitcoin (BTC) as private money under tax laws. Cryptocurrency transactions by individuals in the European Union, including Germany, are exempt from value-added tax (VAT). Short-term capital gains (held for less than a year) are subject to income tax at regular rates, capped at 45% plus 5.5% Solidarity Tax. Profits under 600 euro are tax-free. Assets held for over a year incur no tax liability. Long-term holdings, even if value increases, remain tax-free. Germany’s stance favors long-term investors, providing exemptions for small transactions and VAT, promoting a friendly environment for crypto enthusiasts.