Recent developments in Germany have highlighted that income from crypto lending is taxed at the personal income tax rate as Bitcoin is not considered a legal tender for the purpose of capital gains taxation. The Cologne Tax Court confirmed this development and held that income from the transfer of the cryptocurrency Bitcoin in return for payment (known as crypto lending) is not subject to the 25% flat rate tax but taxable at the regular progressive scale rate.
To adopt the EU requirements on automatic exchange of information under Directive for Administration Cooperation (DAC) to extend to the reporting by crypto-asset service providers on transactions (transfer or exchange) of crypto-assets, the Federal Ministry of Finance (MoF) published a draft bill for a DAC8 Implementation Act (DAC8-draft) on 4 November 2024 which is to come into force on 1 January 2026.
The European Parliament endorsed the first EU rules to trace crypto-asset transfers, prevent money laundering, as well as common rules on supervision and customer protection.
