German Tax Authorities to tighten Crypto Taxation

[Fred]

Federal Ministry of Finance wants to tighten taxation of crypto currencies

"Politicians are currently taking constant fire on the crypto market. The Federal Ministry of Finance (BMF) wants a uniform framework for the taxation of crypto currencies and has presented a draft that will tighten the thumbscrews for investors in the future."

Increase in the holding period

"The holding period will be increased from one to ten years. Sales transactions with cryptocurrencies that take place before this period expires are therefore taxable. This applies to both staking and, for example, lending. The draft therefore initially assumes that cryptocurrencies were used as a source of income, since they were used to generate other cryptocurrencies. Stakers should therefore make advance payments and subsequently notify the tax office of the information that they have used cryptocurrencies for staking. In a second step, legal action could be taken against taxation."

Original German Article

https://www.btc-echo.de/news/bundes...ung-von-kryptowaehrungen-verschaerfen-120730/
BMF document in english attached.

Attachments​

• 
  BMF Crypto.pdf
  1.1 MB · Views: 122

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[Rzeznik]

Nice - was obvious that they︀ will broke some kind "heaven".
So if someone made before transaction crypto-crypto (since they were︁ used to generate other cryptocurrencies.) if takes 10 years to clear their status.
I just︂ wander how it goes with upcoming exit tax changes there.
If someone went there to︃ cash out this year just 50% holdings he could be very surprised at end of︄ 2021 looks like people should cashout/rebuy all this year to clean their trace.
(sell/buy works︅ only if they can make crypto accounting in all sums income= all profits - all︆ costs, some countries have LIFO FIFO etc)

I am so pissed that every-changes almost always︇ goes in EU to kick taxpayer a*s.

 

[Vor]

this is just laughable. I love the rules they invent because it's clear they can‌ enforce none of it. EU is gonna get really desperate on crypto and in the‍ end will kick and scream like a child.

 

[JackAlabama]

Like a⁠ wounded animal in the corner... Rather stay away a few steps as its actions are⁤ hard to predict.

 

[Vor]

EU I think is gonna‍ get particularly desperate about crypto since their such socialist babies who just the thought of⁠ knowing that some guy didnt pay his crypto taxes is gonna drive them mad. USA⁤ will get harsher to it also but the IRS has been use to getting screwed⁣ for quite some time now with their budget cuts and lack of funding. Reality is⁢ short of criminal enforcement there is 0 chance of them really improving cryptocurrency compliance in︀ any meaningful way.

Staking is income? Lovely... what tax form is generated to show this?︁ none. They will spend so much money attempting to track down some guys $100K in︂ staked crypto that they will never be able to practically enforce these measures. It's just︃ not gonna be resource effective to attempt enforcement via blockchain analysis. The IRS is known︄ to reserve blockchain analysis for mainly IRS Criminal Division cases. Civil Audits will seldom if︅ ever see blockchain analysis go into a tax investigation even if it is crypto related.︆

They will simply rely on data they can gather from KYC exchanges that didn't issue︇ forms like a 1099-B however, so if say a Coinbase account was left undeclared. USA,︈ Germany, and any other country with increasingly high taxes is just gonna target the idiots︉ who cash out to their bank accounts but dont report the income. It's an easy︊ slam dunk and the only current cost effective way to do crypto tax enforcement. competent︋ auditors dealing in crypto who understand it actually and then the resources to do blockchain︌ analysis will have to remain reserved to criminal investigations into money laundering and terrorist financing︍ they will not be able to chase down every joe who they suspect of tax︎ evasion.

With a little knowledge on how to anonymize your crypto holdings, the tax havens️ of old are going to become available to everyone from the peon to the guy‌ in the porsche. While I am not always the biggest fan of crypto I do‍ think if things continue to develop rapidly it's great because the tax officials cannot keep⁠ up and their will be something better than a 80s swiss bank in your pocket.⁤ A crypto wallet that no whistleblower or regulatory change can de-anonymize.

 

[renegrade]

I totally agree with you!

 

[JackAlabama]

nicely written and pretty accurate about the state of⁤ affairs inherent to gov agencies.

 

[clemens]

It's not just Germany. Europe is going crazy in regards to taxes.

 

[carz]

Yup not just germany… but because of germany 😛

Joking aside, god help the‌ eu with this new government.

 

[clemens]

yeah it is going to be incredible exciting to watch the next 5 - 10‌ years how things will change.

 

[Vor]

US is going equally nuts if you see how everyday over there it‌ seems to be a contest of who can blurt out the worst possible tax policy‍ proposal.