Last Updated: 1 December 2022
Bitcoin trading, but also other cryptocurrencies such as Bitcoin Trader, is to be classified under § 23 of the Income Tax Act (EStG) as private sales transactions. An exemption limit of 600 euros per year is set.
Once the speculation period of one year is over, the investor can sell his Bitcoins tax-free. But what is it really like now?
How are profits taxed?
Anyone who trades in cryptocurrencies, such as with Bitcoin Trader, can expect regular profits, but should know how these are taxed. Cryptocurrencies count as virtual currencies, but are not legal tender.
This puts Bitcoins on the same level as foreign currencies. This means that cryptocurrencies are considered private money for tax purposes. This circumstance leads to the fact that it is a private sale transaction.
So if one sells the coins for a profit, two aspects must be taken into account. When was the time of purchase and how high was the profit. As a result, the profit may not have to be taxed.
How can one profit from Bitcoin Trader?
Step 1: Click on the link to go to the official website of Bitcoin Trader.
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!
When do taxes not apply?
Bitcoin Trader Buy cheap and sell expensive. Volatility will always cause big price movements. If you choose the right time to buy and then sell again, you can sometimes make big profits.
The tax office can then enjoy high profits just like the investor. But this is only possible if the capital gain is within one year of the one-year speculation period.
If you bought your Bitcoins more than a year ago, the capital gain is no longer relevant. In general, a profit made after one year is tax-free. However, there is one exception.
If interest is also earned, the final withholding tax comes into effect and the period is extended to ten years.
600 Euro exemption limit – what is it all about?
If you sell your Bitcoins, for example after three or four years within the speculation period, the profit is taxed at your personal tax rate. You should bear in mind the exemption limit of 600 euros. This means that if the profit remains below 600 euros, it is tax-free.
However, it should be noted that all sales transactions are included. It is important to note that there is a difference between the exemption limit and the tax-free amount.
If it is the exemption limit, the whole amount is taxed if the gain is higher than 600 euros. If the capital gain is 800 euros, this is taxed. With the exemption limit, only the 200 euros above that would then be taxed.
Document purchases and sales
In order to determine the capital gain, the difference between the purchase price and the sales price is taken into account. For example, if bitcoins were bought for 1000 euros and sold for 1800 euros, the capital gain is 800 euros.
It is also important to document when Bitcoins were bought and at what price. Furthermore, this is decisive for the speculation period. Here, the “first in, first out” method should be considered. Here, the Bitcoins that the investor bought first are sold.