According to Katja Hessel, state secretary of the German parliament, crypto traders can obtain exemption from the tax on the sale of digital currencies. If they hold their assets for one year or more, they will not have to pay taxes on the money they earn from the sale. The German Federal Ministry of Finance has issued 24-page guidelines defining blockchain technology ideas, such as airdrop, staking, masternode, mining, as well as tax charge on the crypto sale and purchase.
For the first time, leading German financial institutes and representatives of 16 Länder have had a major debate on the formulation of crypto tax laws in the state. The state ministers held meetings last summer to assess the views of various cryptocurrency companies and individual traders. One important question regarding the sale of digital assets is whether lending or staking will extend the tax exemption period to 10 years. It's the same as buying real estate.
Patric Hansen, a well-known EU policy expert who works as a crypto business consultant at Presight Capital, said it was a huge success that made Germany a very attractive country (in terms of indoor currency taxation). The document issued by the authorities also ensures transparency regarding airdrops, which is a well-known way of distributing cryptographic tokens, which is intended to attract new liquidity and users. The German Ministry of Finance further stated that when using exchange offices to gain access to airdrop, the recipients will be subject to income tax.
If someone doesn't have to do anything to get an airdrop, they won't have to pay income tax. However, airdrops can still be taxed like other gifts. Hansen summed it up in words:
"PEOPLE USUALLY MUST PAY AIRDROPS TAXES, BUT THERE WILL BE MANY EXCEPTIONS"
Hansen emphasized another important condition of the regulation for employees who receive pay in the form of cryptocurrencies. According to the regulator, cryptocurrency tokens will not fall within the tax band if they are not listed on any stock exchange or have no market value. This means that employees' wages paid in cryptocurrencies will not be taxed unless they start trading.