Bitcoin Taxes: Here's what you should consider when investing!

Even though Bitcoin is a relatively new technology, most of the same tax rules apply as for other assets. Read on to learn what you should look out for when filing your next tax return regarding Bitcoin.

Do you have to pay tax on bitcoin gains? 

The simple answer is yes. 

However, there are a few basic things to understand about Bitcoin and taxes. 

In the DACH region, Bitcoin is not a recognized currency. While there are stores that accept Bitcoin as a means of payment, which we of course support, the authorities do not (yet) consider Bitcoin as an official means of payment. Depending on which country you live in, Bitcoin is either described as "other economic good" and its profits as "income from capital assets". For investors, this means that you have to document your purchases, sales and profits exactly and include them in your tax return in some form.

What is the tax on Bitcoin? 

Since each country has its own tax laws, it is not possible to make a blanket statement about the tax rate that applies to Bitcoin. In addition, there are special cases in certain countries. We have listed more details below for Austria, Germany and Switzerland.

Bitcoin Taxes in Austria

In Austria exists a tax obligation since March 1, 2022, which taxes Bitcoin and other cryptocurrencies in the income tax at 27.5%.

Previously, tax regulations were similar to those in Germany, especially with regard to the tax-free holding period of more than one year. However, these were abolished with the new obligations. Those who now still hold Bitcoin purchased before February 28, 2021, thus have old holdings and are therefore not affected by the new taxation regime. These assets will continue to be taxed as before the eco-social tax reform.

Bitcoin Taxes in Germany

Of all the three countries, Germany has the most versatile solution for the taxation of Bitcoin and cryptocurrencies. 

Everything that is held in Germany for longer than one year is tax-free. So if you buy your Bitcoin on January 1 and sell it a year later on January 2 and realize a profit, it is tax-free. If one does not hold his Bitcoin for such a long time or makes intermediate sales, one must pay attention to two things. If the profit is less than 600 euros, this is also tax-free. As soon as the profit exceeds this limit, it is taxed and offset against income tax.

Bitcoin Taxes in Switzerland

If you live in Switzerland, you know how cantonal regulations affect your tax returns.  

For Bitcoin investors, this means that you will find different tax rates in different cantons. However, since Bitcoin has no further complex investment forms, such as staking or liquidity mining, it falls under the wealth tax. This means for you as an investor:in that you pay tax on your Bitcoin at the cantonal wealth tax rate. Depending on where you live, the tax rate is between 1.3% to 10.1%. 

Bitcoin profits are capital gains tax free as Switzerland has no capital gains tax.

Buy bitcoin securely and record all transactions

Recording bitcoin transactions is the most important thing for all countries. The better and more detailed you can prove the purchase, the better. 

We have thought of that at Coinfinity. When you buy Bitcoin with us, we guide you through the process step by step and all transactions are visible in your account.

Register Coinfinity Account

To buy with Coinfinity buy Bitcoinyou must first create an account. Create it first, and then log in to the Coinfinity portal. You can do this either online or with the Coinfinity Bitcoin App on your smartphone.
Now you can verify your first Bitcoin purchase via SEPA transfer so that you can use all functions of the Bitcoin portal.

If you have bought your first Bitcoin at Coinfinity, you will receive transaction data including receipts.

You can retrieve them like this:

Click the "My Activities" button in the menu on the left of the Dashboard

To get more information about a transaction, click the "Details" button in the column of the relevant transaction.

If you want to download an invoice for a specific transaction, this is possible in the transaction details.

If you want to download an overview in addition to the invoices, you can click on the download arrow on the activity dashboard. In the background it will download the transaction overview as a CSV file. 

In it you will find all the transaction details you need for the tax return. From the time of purchase to the transaction number, everything is listed.

Comment on the data in the article

Bitcoin is a young technology and in some ways still in its nascent stage. Therefore, we may still see adjustments in tax laws in the coming years. 

The information in this article was written in December 2022 and represents the state of knowledge at that time. However, our article is not a substitute for tax advice. Therefore, we strongly recommend that you consult your tax advisor for any Bitcoin tax questions.


Is Bitcoin capital gains tax free?

That depends on where you live. In Germany, gains of €600 are tax-free within one year. After the one-year holding period, your Bitcoin earnings are also tax-free. 

In Austria there is something not. In Austria, investors always have to pay tax on their Bitcoin gains. In Switzerland, on the other hand, profits are completely free of capital gains tax, as there is no capital gains tax.

How is Bitcoin taxed?

In Germany, Bitcoin held for more than one year are tax-free. If one sells within the year, the tax is calculated from the income tax rate. This tax rate can vary depending on the income. 

In Austria, as of March 1, 2022, all cryptocurrencies, including Bitcoin, will be taxed at the income tax rate of 27.5%. 

In Switzerland, Bitcoin is subject to wealth tax. This varies from canton to canton and is taxed from 1.3% to 10.1% depending on the canton. Bitcoin profits, however, are exempt from capital gains tax.

Do I need to document my bitcoin transactions?

Absolutely! The more documentation and receipts you have for your Bitcoin purchases and sales, the better. 

On the Coinfinity Bitcoin portal you can easily download all your Bitcoin transactions in the activity overview in the form of a CSV file. 

Buy Bitcoin securely and easily now with the Coinfinity Bitcoin App!
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