New: Judgment on cryptocurrencies – Cologne Finance Court #Bitcoin #ethereum #monero #tax #tax office
And again there is something new about the taxation of cryptocurrencies. The Baden-Württemberg Finance Court had already decided last year that cryptocurrencies are an economic good within the meaning of Section 23 (1) sentence 1 no. 2 EStG and that private transactions with cryptocurrencies within the one-year holding period are therefore relevant.
According to a press release dated February 25, 2022, the Cologne Finance Court also followed the findings of the Baden-Württemberg Finance Court in its judgment of November 25, 2021 (file number: 14 K 1178/20).
According to the Cologne Finance Court, cryptocurrencies are “other economic goods” within the meaning of Section 23 Paragraph 1 No. 2 EStG. The qualification as an asset does not violate the principle of certainty, since there are no ambiguities about the object of the asset. The crypto values (Bitcoin, Ethereum and Monero) traded in the matter to be decided are marketable and independently assessable. In addition, there is a uniform comparability with foreign currencies.
However, the decision is not final. The revision procedure is pending at the Federal Fiscal Court under file number IX R 3/22.
What are the consequences of the judgment?
It is foreseeable that now only the Federal Fiscal Court can “help” to decide differently on the taxation of cryptocurrencies in Germany. It is not to be expected that different legal opinions will be represented in proceedings that may be pending before other tax courts. In this regard, following two decisions by finance courts, it can be assumed that there will be established finance court decisions on the taxation of cryptocurrencies in Germany.
It should also not be overlooked that the Cologne Finance Court expressly referred to the extended assessment period of 10 years in the event of tax evasion, so that the tax authorities still have plenty of time to discover facts that are unlikely to be clarified and, if necessary, to prosecute.
Crypto investors should take this new ruling by the Cologne Finance Court as an opportunity to find out more about the taxation of cryptocurrencies and, if in doubt, consult a tax advisor who specializes in taxation. This applies all the more if income and profits generated in the past in connection with cryptocurrencies have not yet been declared to the tax authorities.
by Attorney Martin Figatowski, LL.M. (Tax)
For questions about the taxation of cryptocurrencies and for the creation of your crypto | I am at your disposal for the NFT tax return.
I am a lawyer at GTK Rechtsanwälte Klein Figatowski Todtenhöfer PartmbB and previously worked for many years in the higher service of the NRW financial administration, among other things as a department head in the tax investigation/criminal matters and fines office. You can find our law firm’s website at www.gtkr.de and my personal website at www.martin-figatowski.de .