The European country of Germany has announced some good news for cryptocurrency holders. The country has stated that all traders and crypto supporters who hold their tokens for more than a year will not be required to pay taxes on their digital assets.
This is a dream scenario for most cryptocurrency owners. Countries like India have already declared that they will impose heavy capital gains taxes on all traders who choose to sell or exchange their coins. Major cryptocurrency holders may decide to move to Germany in the coming weeks and months due to the new rule.
Germany is becoming more crypto-friendly
The move comes because of new tax rules implemented by German lawmakers. According to a report released by the popular cryptocurrency exchange Gemini, crypto trading in Germany has grown quite large over the years, with about 17 percent of the population having ever traded or held digital currencies. In addition, Germany is believed to be home to approximately 14 percent of Ethereum nodes and nine percent of Bitcoin nodes, making it one of the largest contributors to the growth of both networks.
The new rules came about in a 24-page document detailing the consultations that took place with stakeholders in 16 separate provinces in the country. State Secretary Katja Hessel explained in a statement as follows:
“The deadline will not be extended to ten years if, for example, Bitcoin was previously used for lending, or if the taxpayer has provided Ether as a stake to someone else to create their block.”
Some transactions are still taxed.
While the news is certainly positive, it appears that the rules do not apply to all tokens in the cryptocurrency space. For example, the document stated that airdrops would be subject to income tax reporting requirements provided the individuals in question did not provide their personal information to the companies operating the airdrops. Those who provide their information will be clear. Hansen further noted:
“Normally people have to pay taxes on airdrops, but there will be many exemptions.”
In addition, anyone who is paid in crypto or has a job where they earn digital assets will be taxed when trading those assets or entering into transactions.
Still, Hansen says Germany is aligned to boost crypto adoption across Europe. He described the country as “absolutely ahead of most other countries in the world in crypto regulation, taxation, [anti-money laundering] regulations, especially the implementation of travel regulations, and crypto business licensing.”