**Cryptocurrency Taxation in Germany: What You Need to Know** In Germany, short-term crypto tax falls under regular income tax rates of up to 45%. Crypto-to-crypto trading as private sales transactions is also subject to income tax. **Factors Affecting Cryptocurrency Taxation:** * **Duration:** Short-term crypto holdings (under 12 months) face higher taxes. * **Frequency of Trading:** Frequent trading activity can lead to higher tax rates. * **Size of Gains:** Larger cryptocurrency gains result in higher tax liability. **How to Calculate Cryptocurrency Tax:** For example, if a single German taxpayer earning €55,000 annually from regular employment earns additional €10,000 from short-term cryptocurrency trading, they would pay income tax at a marginal rate of 26% (24,900 - 55,960). This would result in a tax liability of €2,600 on the €10,000 cryptocurrency earnings.
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