Last Updated: 6 December 2023
The Bitcoin price is still on the upswing. More and more investors are trying their luck and investing in cryptocurrencies. However, many investors do not know what the tax on profits is all about. Is trading with Bitcoin Circuit taxable?
When are profits from Bitcoin Circuit tax-free?
To this end, investors should know that two scenarios are crucial:
- the amount of the gain
- the holding period, when the purchase and sale was made
Generally speaking, anyone who holds Bitcoins for more than a year does not have to pay tax when they sell them. It does not matter how high the profit was. However, if the sale is made within one year, the amount of the profit is decisive.
Profits up to 600 euros are not taxable, but if the profit is only one euro above the exemption limit, the entire amount must be taxed. This exemption does not only apply to Bitcoin trading, but also to all private sales transactions.
For example, if you sell a work of art that generated a profit of 1000 euros, you will exceed the tax-free allowance. This means that profits from Bitcoins that arose from the sale during the year will be taxed.
How can one profit from Bitcoin Circuit?
Step 1: Click on the link to go to the official website of Bitcoin Circuit.
Step 2: Fill out the form to get a FREE licence to trade.
Step 3: Follow the instructions on the platform to profit from bitcoin fast!
Disclose the income on your tax return
In order for the taxable amount to be calculated, the sales price is subtracted from the purchase price and sales promotion costs. Under sales promotion costs, dealer commissions could possibly be mentioned. If the income is fixed, it can be entered in the annex “Other income”.
If the income is less than 600 euros, you do not need to fill out this annex. However, so that the tax office does not ask unnecessary questions, the corresponding form should be filled out completely.
What taxes on Bitcoins and other currencies?
The tax rate from profits from bitcoin trading is not flat-rate. It depends on the personal income tax rate, the solidarity surcharge and possibly church tax.
Those who sell Bitcoins with losses can minimise the tax burden. The losses can be offset against other profits from private sales transactions. The time limit is within one year.
However, you can take the losses into the next year and offset them against any gains there.
Lend Bitcoins and pay tax on the interest
There is an option to lend bitcoins and receive interest on them. This is called coinlending. However, this can mean consequences for the taxation of the profits. The holding period can extend to ten years until the investor can sell the Bitcoins tax-free.
The amount of profit is not decisive. Within ten years, the exemption limit of 600 euros continues to exist. Interest may have to be taxed. This is where the final withholding tax or capital gains tax comes into play.
Individuals have a tax-free allowance of 801 euros of interest income per year. Anything above this is taxed at 25 %.