Everything You Need to Know About Crypto Capital Gains Tax in Germany, Italy, and France

In many European countries, when crypto traders and investors realize profits, they are required to pay capital gains tax. Different nations adopt varying rules for cryptocurrency taxes. If you live in Italy, Germany, or France, this article is for you. We will help you understand crypto capital gains tax in your country and how to calculate it.

How Do You Calculate Crypto Capital Gains Tax?

Profits from crypto trading or investments are known as capital gains. To calculate them, you simply subtract the buying cost from the selling price. For instance, if you purchased Bitcoin for $60,000 and sold it for $66,000, then the realized profit will be $6,000. This profit will be subject to capital gains tax applicable in your country. Let’s say the capital gains tax is 20%. To calculate tax payable, multiply 20/100 by $6,000 to get $1,200.

Crypto Capital Gains Tax in Italy

Several crypto transactions attract taxes in Italy. For example, Italians must pay taxes when converting digital assets into euros or trading cryptocurrencies and NFTs. Note that Italy doesn’t distinguish between long- and short-term crypto profits, meaning you will pay the same capital gains tax whether you realize profits within a month or a year.

So, what’s the crypto capital gains tax rate in Italy? As of November 2024, profits from crypto exceeding 2,000 euros attract a 26% capital gains tax. However, the Italian government plans to adjust the tax to 42% in the coming months.

According to Prime Minister Giorgia Meloni, the tax adjustment is intended to address the deficit in the national budget. It is worth mentioning that capital gains valued below 2,000 euros will not be subject to taxation.

Does crypto mining attract taxes? While the Italian administration has yet to provide guidance on crypto activities like staking and mining, it is presumed that the activities will taxed in the future. Some experts say mined cryptocurrencies will fall under the ‘personal income’ category and be taxed at least 23%.

Crypto Capital Gains Tax in France

In France, cryptocurrencies are considered movable assets, meaning profits from trading them attract taxes. However, there are several crypto transactions that are tax-free. For example, you will not be taxed when buying crypto using cash or transferring your digital assets from one wallet to another.

Crypto gains tax rates in France vary depending on how frequently a trader engages with digital assets. For instance, if you trade occasionally, you’ll pay a 30% tax on generated profits. Meanwhile, frequent traders pay a 45% tax on capital gains. It is important to highlight that profits below 300 euros are exempted from taxation.

Crypto Capital Gains Tax in Germany

Like the other two European countries, Germany imposes crypto capital gains taxes. However, some transactions do not attract taxes. They include donating crypto, buying digital assets with fiat, transferring crypto between wallets, and swapping tokens within a project.

Note that the German government encourages long-term crypto investment strategies by not imposing taxes on cryptocurrencies held for more than a year.

The German tax collector Bundeszentralamt für Steuern has placed digital assets under the ‘private economic goods’ category, which attracts taxes of up to 45%. The tax rate imposed on your crypto profits depends on your yearly capital gains. Furthermore, occasional traders are exempted from paying taxes as long as their annual profits do not exceed 600 euros.

Does Germany tax crypto mining and staking? Yes! Yearly capital gains of at least 260 euros from staking and mining attract a 20% tax.

Final Thoughts

So, which country would you like to apply for tax residency? To answer this question, gauge your profit levels and trading activity. For example, if you make profits of less than 2,000 euros, it will be wise to become a tax resident in Italy. As for long-term holders, Germany can be an ideal choice, considering that crypto held for over a year isn’t subject to taxes. Finally, if your crypto profits are less than 300 euros, you can consider making France your tax residency.

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