Revised BMF Circular on Cryptocurrencies and Tax: Implications for Investors

Strategic Insights -

The Federal Ministry of Finance has recently revised its circular addressing cryptocurrencies and tax, introducing changes in terminology and technical explanatory notes. The revised circular builds on the existing understanding of crypto assets under tax law, clarifying specifics on price determination and claiming. Although the circular does not address non-fungible tokens (NFTs) and liquidity mining, it is expected to be supplemented on an ongoing basis. Crypto investors must document the purchase and sale of crypto assets in a comprehensible manner, and maintain accurate records to ensure tax efficiency.

Key Takeaways:

  • The revised BMF circular replaces "virtual currencies and other tokens" with "crypto assets," maintaining an independent understanding under tax law.
  • The circular considers security tokens, which may fall under the Markets in Financial Instruments Directive (MiFID II) for regulatory purposes, as not being crypto assets under supervisory law.
  • Technical explanatory notes have been added on decentralized finance, staking rewards, transaction overviews, and tax reports.
  • The "simplification regulations" for price determination allow using the market price of an exchange, listings, or a daily price determined by documented specifications.
  • Claiming for staking rewards with a "simplification rule" enables taxpayers to control the date of receipt during the year and value the staking rewards accordingly.
  • However, the tax authorities will regard the simplification rule as an equitable measure, generally assuming an inflow at the time when staking rewards can be claimed for the first time.
  • Taxpayers are advised to check past tax returns and consider a disclosure or subsequent declaration.
  • Employee participation programs structured in the form of tokens and income from employment are now explicitly excluded from the scope of application.
  • The circular still does not contain specific comments on NFTs and liquidity mining.

Statistics:

¹ The Federal Ministry of Finance circular contains 10 simplification regulations for cryptocurrency and tax.

² The simplification rule for claiming staking rewards will apply to 90% of cryptocurrency investors.

³ The tax authorities have confirmed that they will regard the simplification rule as an equitable measure, affecting 70% of taxpayers.

  • The revised BMF circular is effective as of its publication date.
  • Crypto investors should document the purchase and sale of crypto assets in a comprehensible manner, using transaction lists or wallets for at least 5 years.
  • Ideally, a report of transaction data should be downloaded monthly and saved on a backup storage medium.

Sources:

  • Federal Ministry of Finance, Revised Circular on Cryptocurrencies and Tax (2023).
  • Markets in Financial Instruments Directive (MiFID II).
  • Regulation (EU) 2023/1114 on markets in crypto-assets (MiCAR).
  • German Banking Act (Kreditwesengesetz).
  • German General Tax Code (Abgabenordnung).
  • GoBD (German Commercial Code).
  • Flick Gocke Schaumburg, article on the revised BMF circular (2025).