When is your gain tax free?

How the tool calculates

For every position the calculator works out three numbers: the gain, the end of the holding period and the distance to the day of sale. The gain is quantity times selling price minus quantity times purchase price, before fees. The period ends one year after the day of purchase: buy on 14 March 2025 and the period runs out at the end of 14 March 2026, so a sale from 15 March 2026 onwards is tax free. If the purchase falls on 29 February, the period ends on the last day of February in the following year.

The calculator then sorts the positions into two pots. Everything still inside the period on the chosen day of sale goes into the taxable pot, gains and losses together. Everything past the period counts towards the tax free pot. The total of the first pot is compared with the exemption limit for the year of sale. Stay below it and no tax falls due. Reach or exceed it and the full amount is multiplied by the tax rate you set. The large figure at the top shows how many days are left until the earliest position still bound by the period comes free.

The rules behind it, with the section numbers

This section describes German tax law. Readers taxed in another country are governed by that country's rules, and nothing here is transferable to them. Following the judgment of the German Federal Fiscal Court (Bundesfinanzhof) of 14 February 2023 (IX R 3/22), crypto-assets are other assets in the sense of the statute. Section 23(1) sentence 1 no. 2 of the German Income Tax Act (Einkommensteuergesetz, EStG) therefore applies: a sale is a private disposal transaction only if no more than one year lies between acquisition and disposal. After that the gain is tax free, however large it is. Within the year your personal income tax rate applies, not the flat withholding rate of 25 per cent.

Why the order of purchases counts

Anyone who bought the same crypto-asset more than once has to say which units go on a sale. The German Federal Ministry of Finance circular of 6 March 2025 names individual identification first, in paragraph 61. Where that is not possible, the units acquired first count as sold for the holding period; for valuation the average method is provided for, and for simplicity first in, first out may be used there as well. The bracket around all of this matters: the assessment is made per wallet. Within one wallet the method once chosen stays until every unit of that label has been sold. Hold the same coin in three wallets and you have three separate calculations and three separate choices.

Since the same circular there is a clear duty to cooperate with the tax office. Among the things asked for are records of purchase and sale, the prices applied, the source of those prices, the disposal order chosen per wallet and documentation of movements within wallets. The calculator here does not replace those records, it only makes visible what matters.

Where the calculator stops

It works row by row, not by disposal order. Anyone who bought bitcoin ten times and sold part of it once has to decide for themselves which purchase rows the sale hits. Fees on purchase and sale are left out, although both reduce the taxable gain: under the ministry circular, purchase fees count as incidental acquisition costs, while transaction fees incurred in connection with the disposal are to be treated as income-related expenses under paragraph 59. The solidarity surcharge and church tax are missing too, and the tax rate is an assumption, not an assessment. Swapping one coin for another is a sale and a purchase at the same time, which can only be shown here as two separate rows. Staking, lending, mining, airdrops and hard forks follow their own rules and do not belong in this list. And the calculator knows neither your other income nor your marital status. Anyone planning to sell should put the result to a member of the tax advisory professions.

Frequently asked questions

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