Bitcoin Formula – Do I have to pay taxes?

Last Updated: 27 May 2023

Bitcoin and Co. are currently the talk of the town, as their volatile markets mean that a lot of money can be earned with these cryptocurrencies. More and more private investors are also taking advantage of this opportunity to achieve a satisfactory return on their investment, even in the current phase of low interest rates.

Automatic trading bots, such as Bitcoin Formula, are particularly interesting for these private investors. These are special computer programs that automatically handle bitcoin trading.

The trick is that the sophisticated algorithms of these trading bots independently monitor the market and can recognise buy or sell signals within seconds and act accordingly.

The investor does not have to do anything other than set a few basic parameters, such as the capital to be invested, with a few mouse clicks and then hope that the software actually generates a return.


Bitcoin Formula - Do I have to pay taxes?

Is there tax on profit from bitcoin trading?

Regardless of whether you trade yourself or through software, you should make a profit at the end of the trade if possible. At the latest when filling out the tax return, many small investors then ask themselves whether they have to report their profits to the tax office and whether these are taxed.

Whether tax is due on profits from bitcoin trading, however, differs from case to case. For example, the profit from the sale of Bitcoins that have been in the possession of the investor for more than one year is in principle tax-free.

If the Bitcoins were only held for a shorter period, fortunately, tax does not always have to be paid. This is because there is an exemption limit of 600 euros. If the profits made are less than this value, no tax is due.

However, the exemption limit does not only apply to bitcoins, but to private sales in general. Accordingly, trading with other cryptocurrencies or with art objects etc. also falls under this definition.

Due to the tax exemption limit, small investors in particular should check at the end of the year whether it is worth exceeding the exemption limit. If it is foreseeable that this limit will be exceeded, trading should possibly be interrupted for a short time.

Because if the capital gains are greater than 600 euros, they must be taxed in full.

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At what tax rate are profits in the bitcoin market taxed?

There is no fixed tax rate for taxable income from trading in cryptocurrencies, as these are subject to the individual income tax rate.

In addition, the solidarity surcharge must also be paid. If church tax is paid, this also applies to the corresponding bitcoin profits.

Are losses from bitcoin trading relevant for tax purposes?

If trading in Bitcoins is not successful, the investor may incur a loss. These losses can be offset against other profits from private sales. This reduces the tax burden.

If the losses exceed the profits from private sales, the losses can be carried forward for tax purposes for an unlimited period of time.

  • Luke Handt

    Hello, my name is Luke Handt; I am a successful Bitcoin trader, financial analyst, and researcher. I have been studying the market trends for the conventional stock exchange system globally since I was in college.

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