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Germany Releases Crypto Tax Guidance

Crypto Investors to Pay Taxes on Profits

FIFO Method Preferred for Calculating Gains

The German Federal Central Tax Office (BZSt) has released new guidance on the taxation of cryptocurrency investments. The guidance clarifies that crypto investors are required to pay taxes on any profits they make from their investments. The BZSt recommends using the first-in, first-out (FIFO) method for calculating gains when units cannot be identified.

The new guidance also provides clarification on the treatment of crypto mining and staking rewards. Mining rewards are considered income and are taxed at the investor's marginal income tax rate. Staking rewards are treated as interest and are taxed at a rate of 25%.

The BZSt's guidance is a welcome development for crypto investors in Germany. It provides much-needed clarity on the tax treatment of cryptocurrencies and will help investors to plan their tax affairs more effectively.