The European nation of Germany has announced some major news for crypto holders. The country has stated that all traders and crypto fans who hold their tokens for more than a year will not be made to pay taxes on their digital stashes.
Traders in Germany Will Soon See a Tax-Free Environment
This is a dream scenario for most traders, regardless of where they are or their stations in life. Countries like India have already stated that they are going to be enforcing heavy capital gains taxes for all traders who choose to sell or exchange their coins. Perhaps Germany is going to get several new residents in the coming weeks and months as these rules wear investors down.
The move comes by way of new tax regulations Germany’s lawmakers have implemented. According to a report issued by popular digital currency exchange Gemini, trading crypto in Germany has gotten quite big over the years, with roughly 17 percent of the population having traded or held digital currency at one time.
In addition, it is believed that Germany offers roughly 14 percent of Ethereum nodes and nine percent of bitcoin nodes, making it one of the biggest contributors to the growth of both networks. The new rules came about in a 24-page document that details consultations that took place with stakeholders across 16 separate counties within the nation. State Secretary Katja Hessel explained in a statement:
The deadline is not extended to ten years if, for example, bitcoin was previously used for lending, or the taxpayer provided ether as a stake for someone else to create their block.
European Union (EU) policy expert Patrick Hansen also threw his two cents into the mix, mentioning to crypto firm Blockworks:
This is already a huge success and makes Germany a very attractive country crypto tax-wise.
While the news is certainly positive, it appears the rules will not apply to all measures or tokens contained within the digital currency space. For example, the document mentioned that airdrops would be subject to income tax reporting requirements granted the individuals in question have not provided their personal data to the companies performing the airdrops. Those that do provide their information will be in the clear. Hansen further commented:
People normally have to pay taxes on airdrops, but there will be a lot of exemptions.
Some Transactions Will Still Be Taxed
In addition, anyone who is paid in crypto or holds a job where they earn digital assets will be subjected to taxation upon trading those assets in or engaging in transactions.
Still, Hansen says that Germany is in line to boost crypto adoption throughout Europe. He described the country as “definitely ahead of most other countries in the world in terms of crypto regulation, taxes, [anti-money laundering] rules, particularly its travel rule implementation, and the crypto business licensing.”