German Case Law on Bitcoin and Crypto Assets

Federal Fiscal Court, judgment of 14 Feb 2023 – IX R 3/22: gains on cryptocurrencies are taxable

The Federal Fiscal Court (BFH) held that virtual currencies (currency tokens such as Bitcoin, Ether, Monero) are assets, and that gains from disposing of them within one year of acquisition are taxable private disposal transactions (sec. 23 (1) sent. 1 no. 2 EStG). There is no structural enforcement deficit preventing taxation. A token is also acquired by exchanging it for other cryptocurrencies; a conversion into euros is not required for taxability.

Practical relevance: every transfer for consideration – including crypto-to-crypto swaps and using crypto as means of payment – can be a taxable disposal. In gifts and inheritance cases, by contrast, the predecessor's acquisition data carry over (sec. 23 (1) sent. 3 EStG) – a central building block of succession planning.

Source: bundesfinanzhof.de

Federal Ministry of Finance, circular of 6 March 2025: income-tax treatment of crypto assets

The tax administration comprehensively updated its position on crypto assets: acquisition and disposal, swaps, staking, lending, airdrops and hard forks, as well as taxpayers' cooperation and documentation duties. The circular replaces its 2022 predecessor and binds the tax offices.

Practical relevance: anyone transferring crypto assets – by gift, sale or contribution to a company – should meet the documentation requirements (acquisition dates, prices, transaction history) from the outset. Notarial deeds contribute reliable evidence.

Source: bundesfinanzministerium.de

Higher Regional Court of Cologne, order of 26 June 2024 – 11 W 15/24: custodians must do everything reasonable to release crypto assets

A trustee had been ordered by final judgment to transfer substantial crypto assets from two escrow wallets to a new trustee and pleaded technical impossibility (lost private key). The court confirmed a coercive fine under sec. 888 of the Code of Civil Procedure: the debtor had not taken all reasonable measures – engaging specialised recovery providers and regulated custodians was, in particular, reasonable.

Practical relevance: whoever holds crypto assets for others – as trustee, custodian or executor – bears far-reaching duties of effort. Escrow and custody agreements should define access routes, key management and release mechanisms precisely from the start.

Source: nrwe.justiz.nrw.de

Berlin Court of Appeal (Kammergericht), judgment of 25 Sep 2018 – (4) 161 Ss 28/18 (35/18): Bitcoin was not a financial instrument under the former KWG

The Kammergericht acquitted the operator of a bitcoin trading platform of conducting unlicensed banking business: bitcoin was neither a unit of account under the Banking Act (KWG) nor e-money under the Payment Services Act (ZAG); the supervisory authority's contrary practice exceeded the limits of permissible interpretation in criminal law.

Practical relevance: the decision marks the starting point of today's regulation – the legislature responded: since 2020, crypto assets are covered by the KWG and crypto custody is a licensable financial service (sec. 1 (1a) sent. 2 no. 6 KWG); since the end of 2024, the European MiCAR regulation applies in addition. For incorporations in the crypto sector, regulatory classification is now a central structuring issue.

Reference: dejure.org

Cologne Tax Court, judgment of 10 Sep 2025 – 3 K 194/23: income from crypto-lending is taxed at the personal rate

For the first time, a tax court has classified income from so-called crypto-lending – the compensated, temporary provision of Bitcoin to other users via a platform: it is miscellaneous income within the meaning of sec. 22 no. 3 EStG, taxable at the personal rate, and not capital income subject to the flat-rate withholding tax. Bitcoin does not embody a claim directed at money, so there is no capital claim within the meaning of sec. 20 EStG.

Practical relevance: the decision shows how differentiated the taxation of individual crypto uses has become. It is not final; the appeal is pending before the Federal Fiscal Court under VIII R 23/25. The further development is also of interest for the planned reorganisation of crypto taxation.

Source: press release justiz.nrw.de

Nuremberg Tax Court, judgment of 22 Jan 2025 – 3 K 760/22: crypto assets are taxable assets, and swaps are taxable too

The Nuremberg Tax Court confirmed the Federal Fiscal Court's line on the merits: Bitcoin, Ether and comparable units meet the requirements of "other assets" within sec. 23 (1) sent. 1 no. 2 EStG, provided they are transferable, marketable and market-valued. Taxation of realised gains from swap transactions does not require conversion into legal tender ("cashing out") – what matters is the realisation of an economic advantage.

Practical relevance: swapping one cryptocurrency for another can also be a taxable private disposal within the one-year period. This is an important consideration for documenting acquisitions – including in the context of notarial transfers.

Reference: gesetze-bayern.de (BeckRS 2025, 7241)

Crypto-Asset Tax Transparency Act (KStTG) – in force since 1 January 2026

The KStTG implements the European DAC8 directive: providers of crypto-asset services (exchanges, custodians) collect and report transaction and personal data of their users to the tax authorities. The first transmission is scheduled for 2027 (for data from 2026). This ends the effective opacity of crypto transactions towards the tax administration.

Practical relevance: evidentiary documentation of acquisition date, cost and origin of holdings becomes mandatory practice – not least to avoid unfavourable estimates. Notarial deeds on acquisition and transfer make a robust contribution.

Source: gesetze-im-internet.de

Planned: abolition of the one-year holding period from 2027 (legislative project)

The German government plans to abolish the one-year holding period of sec. 23 EStG for private crypto assets and to tax crypto gains in future regardless of the holding period (allocation to income from capital assets, flat-rate withholding tax). Planned entry into force: 1 January 2027. This is a legislative project, not yet applicable law – the parliamentary process and key details (grandfathering, loss offsetting) are open.

Practical relevance: until promulgation, current law applies. In detail in the article Bitcoin and tax: the end of the holding period from 2027.