Correction, September 7, 2026: We narrowed the one-year explanation to the relevant private-asset rules, corrected the €1,000 threshold boundary and replaced the claim that FIFO is universally mandatory. We removed unsupported comparisons and planning advice.
The one-year rule has a defined scope
For relevant privately held crypto assets, a sale within no more than one year of acquisition can fall within the private-sale rules of Section 23 EStG. A disposal outside that period can fall outside those rules. This does not mean all income involving crypto becomes tax-free after a year: business assets, rewards and tokens with other legal characteristics need separate classification. Section 23 EStG.
The Federal Ministry of Finance’s March 6, 2025 circular explains the treatment of specific crypto assets. Use the actual acquisition and disposal dates and the applicable asset classification, rather than a generic claim that any 365-day holding is exempt. BMF circular, English translation.
€1,000 is a threshold, not a deduction
Section 23 provides an exemption where the combined gain from relevant private sales in the calendar year is less than €1,000. At exactly €1,000, that exemption condition is no longer met. It is not an allowance that makes the first €1,000 deductible from every larger gain. Relevant non-crypto private sales also matter. Section 23(3) EStG.
For illustration, compare annual relevant gains of €990 and €1,000. The first is below the threshold; the second is not. This comparison concerns that particular exemption only, not a calculation of either person’s final tax bill.
Identify the units and the wallet
The BMF circular addresses individual identification, valuation simplifications and FIFO. Its analysis is wallet-specific, and the selected method must be retained for the relevant token holdings until those holdings in the wallet are fully sold. A new acquisition after that can allow a new method choice. Calling FIFO mandatory in every case was too broad. BMF circular, paragraphs 61–62.
Staking and lending are separate questions
The circular says the ten-year holding-period extension does not apply to currency or payment tokens. That statement does not exempt the income earned from lending or staking, nor does it establish the treatment of every DeFi token. Separate the original asset, any reward receipt and the later sale in your records. BMF circular, paragraph 63 and the lending section.
Make the ledger reproducible
A useful working file records the wallet or exchange, transaction hash, acquisition date, disposal date, quantity, euro valuation, fees and identification method. Keep the original exports alongside a tax-software report. Explain transfers between your own wallets so a reviewer can follow the assets rather than mistake every transfer for a sale.
Flag rewards, business activity, derivatives and unusual contracts for separate assessment. Do not apply this page’s private-sale summary to them by default. A German Steuerberater experienced in crypto can check the facts and filing requirements. See our crypto glossary for terminology. Sources were checked September 7, 2026. This overview is not personal tax advice.
