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BMF rules: Bitcoin in income tax returns

VoltVirtual currencies such as Bitcoin have long been a topic for private investors because they quickly become speculative targets for those willing to take risks. Since January 2019, the Stuttgart Stock Exchange has been providing a free application for trading Bitcoin & Co.

The same is true in tax law, this new phenomenon is now becoming more and more common in daily life. On June 17, the Federal Ministry of Finance issued a draft BMF letter aimed at regulating individual issues related to virtual currencies and tokens. As it is a draft, it may still be changed due to prompts or criticisms from practitioners. Oliver Braatz, tax consultant of Möhrle Happ Luther, has dealt with the details of the draft, because the tax treatment of cryptocurrencies is one of his main areas of work. What do these rules mean for investors?

Expert Braatz pointed out that the most important thing is that the withholding tax applicable to securities investments does not apply to crypto investments. Braatz said: “As a result, investors here cannot benefit from the flat tax rate and simple taxation that the custodian is responsible for almost all aspects.” Instead, they must declare their transactions with Bitcoin & Co. as private sales in their tax returns. . These are taxed at an individual tax rate, which may be significantly higher than the flat rate withholding tax of only 25%, depending on the total income.

In both cases, according to religious beliefs, there are church taxes and solidarity surcharges, which have not been cancelled for particularly high incomes. In addition, a lump-sum payment of 801 euros or 1602 euros in savings does not apply to married couples who are jointly assessed for tax purposes. This applies to dividends, interest or capital gains on securities, but not to private sales transactions. “Anyone who invests money in stocks, bonds or ETFs has become accustomed to the fact that custodians are responsible for almost all tax issues,” Bratz said. “However, through investing in cryptocurrencies, investors must take care of many things for themselves.”

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