Taxation for German Residents

Hold a crypto asset for over 12 months in Germany and the capital gain escapes tax entirely — but interest and quick sales still hit the progressive scale.

In Germany, the taxation of crypto income is unique compared to other EU countries: with a holding period of more than 12 months, the capital gain becomes fully tax-exempt. However, interest income in USDC from 8lends, the receipt of 8LNDS via Proof of Loan/referrals, and selling within 12 months are taxed at the personal progressive rate of 14–45%. The cost basis method is FIFO. The declaration is filed via Anlage SO as part of the annual tax return. From 2026, DAC8 applies. This article is a general guide, not individual tax advice.

Basic parameters

Germany's unique rule — 12 months

The most favorable feature of German crypto taxation is that if you hold a crypto asset for more than 12 months, the capital gain is not taxed upon sale.

Important clarification from the German Federal Ministry of Finance (BMF): using crypto assets to generate income (through lending or staking) does NOT extend the holding period to 10 years. This differs from some other asset classes (where the 10-year rule applies). The period remains 12 months.

This is a key clarification from the BMF-Schreiben of May 2022, still valid in 2026.

Progressive Einkommensteuer scale (2026)

Plus Solidaritätszuschlag of 5.5% on the tax amount (applies only at sufficiently high income levels). Plus church tax of 8–9% (if applicable).

Three types of income on 8lends — tax treatment in Germany

Interest income in USDC (19–25% APR)

This is a complex case because in Germany there are two possible interpretations:

• Interpretation A (more common): interest income from lending = other income (sonstige Einkünfte) under § 22 No. 3 EStG, taxed at the regular rate of 14–45% when exceeding €256/year
• Interpretation B: interest income = capital income under § 20 EStG, taxed under Abgeltungsteuer at 25% + solidarity surcharge

In most BMF interpretations for DeFi lending, Interpretation A applies.

Example: an investor received €2,000 in interest in USDC over the year → taxed at the personal rate (e.g., 35% marginal) = €700 in tax.

⚠️ For precise category determination — a consultation with a Steuerberater specializing in crypto is mandatory.

Receiving 8LNDS via Proof of Loan / referrals

• At the moment of receipt, taxed as other income under § 22 No. 3 EStG
• Tax-free limit of €256/year for crypto income — if the total amount is below it, the tax is 0%
• If it exceeds — the entire amount is taxed, not just the excess
• Cost basis of new 8LNDS = their market value at the moment of receipt (at the EUR rate)

Example: received 40,000 8LNDS at a price of $0.001 = $40 ≈ €37 → below €256, tax 0% this year.

Example 2: received €500 worth of 8LNDS over the year → the €256 limit is exceeded → the entire €500 is taxed.

Capital gain on sale of 8LNDS or positions

• If you sell within 12 months of receipt → taxed as private sales under § 23 EStG, rate 14–45%
• If you sell after 12 months → fully tax-free
• Limit of €1,000/year for private sales — if the total gain amount is below it, the tax is 0%
• If it exceeds — the entire amount is taxed

Example: 14 months after receiving 40,000 8LNDS at €37 — sold at €111 → gain €74 → tax-free (holding >12 months).

Example 2: sold 6 months after receipt → gain €74 → below the €1,000 limit → tax-free.

Example 3: within 12 months received multiple gains, total amount €1,500 → the €1,000 limit is exceeded → the entire €1,500 is taxed at the personal rate.

8lends specificity — monthly interest payouts

This is a critical point for German residents:

• Each interest payout in USDC is a new receipt of a crypto asset
• Each receipt resets the 12-month holding timer for that portion
• If you sell the received interest within 12 months → taxed as gain
• If you hold >12 months → you can sell tax-free

Practical consequence: to maximize tax efficiency — do not sell freshly received USDC, hold it >12 months before converting. Alternatively — reinvest it back into 8lends, in which case it becomes a new investment.

⚠️ This is the basic interpretation. The final interpretation for USDC interest rests with your Steuerberater.

Cost basis in Germany — mandatory FIFO

Germany uses FIFO (First In First Out):

• The first tokens bought / received are the first sold
• Applied within each wallet (Einzeldepot)
• HIFO and LIFO are not applied in Germany

Blockpit automatically applies FIFO for German reports.

Tax-free limits — a critical feature of Germany

Two different limits, not to be confused:

⚠️ Important: exceeding by even €1 leads to taxation of the entire amount, not just the excess. Therefore, when approaching the limit — the strategy may include splitting operations between tax years.

The €1,000 limit is a new value from the 2024 tax year (previously it was €600).

Anlage SO — the main form for crypto residents

For most crypto income in Germany, Anlage SO (Sonstige Einkünfte) is used:

• Private sales section — for capital gains within 12 months
• Other income section — for staking, lending, rewards (PoL and referral 8LNDS)
• If the crypto income is interest and treated under § 20 — Anlage KAP is used instead of Anlage SO
• The form is filed together with the main declaration (Einkommensteuererklärung)

The filing deadline is July 31 of the following year (or until February of the year after next via a Steuerberater).

Losses and carryforward

• Capital losses from private sales (within 12 months) — can only be offset against private sales gains of the same year
• Unused losses are carried forward to future years to offset against private sales gains
• They are NOT offset against ordinary income (salary, business)
• If the holding is >12 months — losses also become irrelevant for taxes (mirror logic with tax-free gains)

DAC8 from 2026

From January 1, 2026, DAC8 applies in Germany:

• The Bundeszentralamt für Steuern (BZSt) receives data on crypto operations from platforms
• The first reports — between January and September 2027
• Applies to platforms serving German residents
• Avoiding declaration becomes practically impossible

Checklist for a German resident on 8lends

• ✅ Keep a full history of operations (via Blockpit or basescan)
• ✅ Declare crypto income (PoL, referrals) in Anlage SO as other income
• ✅ Declare processed USDC interest according to your Steuerberater's specific interpretation
• ✅ Declare capital gains from sales within 12 months
• ✅ Do NOT declare capital gains from sales after 12 months (tax-free)
• ✅ Use FIFO for cost basis
• ✅ Track the limits of €256 (income) and €1,000 (private sales)
• ✅ Keep documents for 10 years (the standard for Germany)

Frequently asked questions

Is it true that in Germany you can avoid paying tax on crypto entirely after a year of holding? Yes, for the capital gain from a sale — after 12 months of holding it is fully tax-free. This is Germany's unique advantage in the EU. But crypto income (staking, lending, rewards) is taxed at the moment of receipt, regardless of how long you then hold it.

Does the 10-year rule apply to my 8LNDS if I lock them? No. The BMF officially clarified in 2022 that using crypto to generate income (lending, staking) does NOT extend the holding period from 12 months to 10 years. The period remains 12 months. This applies to 8LNDS in any activities on 8lends as well.

How do I count the 12 months for USDC interest from 8lends? Each monthly interest payout = a new receipt. The 12-month counter starts from the moment of each payout. If you sell your entire USDC balance 18 months after the first investment — the portion received in the first month has already exited the 12-month period, while the portion received in the last 6 months is still within it.

What if I received €100 worth of 8LNDS and sold them after 6 months for €300? Step 1: receipt of €100 as income — if above the €256/year limit, it is taxed; if below, tax-free. Step 2: sale within 12 months = private sale → gain = €300 − €100 = €200. If the total of all private sales gains for the year is above €1,000 — it is taxed. If below — tax-free.

What does "limit on the whole, not on the excess" mean? If crypto income = €300 per year (above the €256 limit), all €300 is taxed, not just the €44 excess. This is critical — when approaching the limit, consider deferring operations between years.

What if I have USDC interest, and PoL, and a sale of 8LNDS — where do I report each?

• USDC interest — Anlage SO or Anlage KAP (depends on interpretation)
• PoL and referral 8LNDS — Anlage SO as other income
• Sale of 8LNDS / positions within 12 months — Anlage SO as private sales
• Sale after 12 months — not reported (tax-free) Does Solidaritätszuschlag apply? Solidaritätszuschlag (5.5% of the tax) has, since 2021, applied only when taxable income exceeds €17,543 per year (or €35,086 for couples). Most small crypto investors do not pay Soli.

And church tax? If you are a member of a registered church (Kirchenmitglied) — Kirchensteuer of 8–9% of the income tax (depends on the state). You can exit membership (Kirchenaustritt) if you do not want to pay.

What if my Steuerberater suggests a different interpretation for USDC interest? Trust your Steuerberater — they know your specific situation. The key is consistency: applying the same interpretation year after year, rather than changing it.

How long should documents be kept? In Germany the standard is 10 years for all tax documents (Aufbewahrungsfrist). This is longer than in other EU countries.

Can the German tax authority request my history from basescan? Yes, especially after the introduction of DAC8 from 2026. All transactions in public blockchains are potentially visible to the tax authority when there is an "address ↔ identity" link. It is better to declare correctly from the start.

What if I do many operations and the tax authority deems it commercial? If the tax authority recognizes your activity as gewerbliche (commercial), the 12-month rule does not apply — all income is taxed as business income. This usually happens with a very high frequency of operations and professional organization. For typical private investors on 8lends — this is not relevant.

⚠️ This article is a general guide to approaches, not individual tax advice. German crypto taxation is complex due to multiple interpretations for different types of income. For decisions on your situation, consult a qualified German Steuerberater specializing in crypto.

See also:

• Tax Guide for 8lends Investors via Blockpit
• How the 8LNDS Reward System Works
• What Is the 8LNDS Token
• Proof of Loan: How the 8LNDS Bonus Works on 8lends
• Glossary: Key 8lends Terms

8lends is a platform operated by Alpha Systems LLC, registered as a VASP under the supervision of the FSA of Saint Vincent and the Grenadines. Maclear AG (Switzerland), a member of PolyReg SRO under the supervision of FINMA, acts as Collateral Agent. Information on taxation in Germany is current as of May 2026 and does not constitute individual tax advice. Tax legislation changes — check the current rules and consult a Steuerberater. Regulatory framework as of May 2026.