The Federal Ministry of Finance removes the ten-year retention period extension for cryptocurrencies used for staking and lending. This was announced yesterday, April 28, 2022, during the first blockchain roundtable of the FDP parliamentary group.
According to this, cryptocurrencies used for staking or lending can be sold tax-free after one year in the future. The Federal Ministry of Finance will soon publish a corresponding draft letter from the Federal Ministry of Finance. It will now serve as a guideline for the German tax authorities. The former federal government under the CDU and SPD had published a letter from the Federal Ministry of Finance last summer in which it wanted to stick to the ten-year detention period.
Writing about other areas of crypto should follow this year, industry officials who attended the event told BTC-ECHO. After years of legal uncertainty, the Federal Ministry of Finance under the FDP finally gets crypto regulation in Germany. The scene rejoices.
“This is a very important step,” FDP MP for the Bundestag Frank Schäffler told BTC-ECHO. He initiated his party’s first blockchain roundtable. “With this project, the Federal Ministry of Finance is sending a strong signal to the crypto industry in Germany, especially with regard to staking and lending.”
Industry surprised by decision to stake
A total of more than 50 guests were invited to the Blockchain Roundtable in the Bundestag to discuss the project of the Federal Ministry of Finance, including FDP MPs, BMF members and prominent blockchain experts from German-speaking countries, e.g. Bitpanda, an Austrian crypto exchange.
“The surprise of the new letter was very big,” crypto tax expert Werner Hoffmann tells BTC-ECHO. He is co-founder of the crypto tax law firm Pekuna. “I did not expect, after several discussions with the Treasury, that they would deviate from the old line. I find it very positive that she approaches the community with open ears. The design exceeded my expectations.”
DeFi specialist Peter Großkopf is also euphoric. “The BMF critically addressed community feedback in advance and made changes,” the founder of DeFi platform Unstoppable Finance told BTC-ECHO. “It is very welcome that the new federal government and the FDP regime of the Federal Ministry of Finance want to strengthen Germany as a crypto location.”
For trade staking, there is still a need for discussion
For German industry, this is not only a victory in the areas of staking and lending. In the draft BMF letter, which is available for BTC-ECHO, clear general definitions for basic cryptographic terms, such as consensus algorithms, are presented for the first time. “Knowing what to expect in this area is already positive, even in the event of disadvantageous regulation”, says Werner Hoffmann. For many issues, however, there is still a long way to go before full legal clarity is achieved.
“In particular, the area of trade staking will once again give rise to discussions,” Hoffmann believes. “Also, the scope of writing could be expanded to include certain topics. Nothing will be in there about NFT and DeFi protocols. Peter Großkopf wants to work so that “acceptable solutions for citizens, entrepreneurs and the state are created here”. In order to stay on the ball in DeFi, you’ll “likely need an ongoing process going forward,” according to the entrepreneur.
New letter from BMF announced
There are also still ambiguities in documentation and reporting requirements for crypto transactions that need to be resolved in the future. “Frank Schäffler took the example that he would never pay for his coffee with crypto in Germany. Currently, he would have to report this to the tax office. The documentation effort is too great,” says Werner Hoffmann.
According to the expert, Germany needs a small value regulation or a rule that crypto-to-crypto transactions are tax-free. According to him, the Federal Ministry of Finance wants to dedicate a separate letter to this topic in the fall of 2022. However, such advances would also require concrete changes to the law, which are beyond the scope of the BMF at all.
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