A user of the Bitcoin investment app "Bison"
Photo: Marijan Murat/ dpa
Profits from buying and selling cryptocurrencies are also subject to income tax.
The Federal Fiscal Court (BFH) came to this verdict.
The decision was announced on Tuesday verdict.
The top financial judges did not accept the argument that virtual currencies such as Bitcoin, Etherum and Monero are ultimately only algorithms and not real economic goods.
In exactly the same way, however, a plaintiff had tried to fight for a tax exemption in court - and had failed (
Az: IX R 3/22
The plaintiff had invested €20,000 in cryptocurrencies in 2017 and walked out of the year with a whopping €3.4 million.
The man then countered the demands of the tax office by saying that cryptocurrencies are nothing physical, but pure computer algorithms and therefore not an economic good whose trade could be subject to tax.
The ninth BFH Senate, chaired by BFH President Hans-Josef Thesling, did not follow this argument.
From a tax point of view, it is a “different economic good”, comparable to a vintage car or event tickets.
There is a profit tax on these if they are exchanged or sold within 365 days.
Technical details of cryptocurrencies are irrelevant
The concept of economic good is to be interpreted broadly.
It is sufficient that the goods can be bought and are "accessible for a separate independent evaluation".
That is the case with cryptocurrencies.
They would be traded on trading platforms and stock exchanges, would have a market value and could also be used directly for payment transactions.
"Technical details of virtual currencies are not important for the property as an economic good," emphasized the judges.
Profits would therefore be subject to income tax if cryptocurrencies were exchanged or sold again within a year.
The BFH also did not accept the argument that transactions with cryptocurrencies are hardly controllable, so that income tax can hardly be levied across the board.
The financial administration tried early on to subject such transactions to income tax.
In the meantime, there are also far-reaching information obligations and control options.