Germany has long been seen as one of the most welcoming nations to digital currencies, aiming to strengthen its position. As a result, the German Ministry of Finance (BMF) has released the country’s first detailed advice on how digital currencies are taxed.
The instruction modifies the tax rules of the nation to accept digital currency. The new legislation also provides that no capital gains tax would be imposed on the sale of BTC and ETH that have been kept for more than a year.
Katja Hessel, Germany’s Parliamentary State Secretary, emphasized the legislation. Even when digital assets are staked to gain rewards, the law still applies according to her.
“After one year, the sale of acquired [BTC] and Ether is tax-free for private people,” according to the statement.
This differs from the former tax regulation, which stated that staked digital currencies were only tax-free after 10 years of ownership. The remainder of the BMF‘s 24-page paper described and addressed additional digital currency tax problems and a roadmap for further discussion.
Germany demonstrates its commitment to the implementation of digital currencies.
The paper results from Germany’s new government’s vow to assist the digital currency sector. The new regime’s plan would use innovative measures, notably digitization, to restore Germany’s economy to pre-pandemic levels.
Germany, Europe’s biggest economy, anticipates a surge in digital currency investment. According to Forbes, the country’s recent passage of a ‘Fund Location Act’ paves the way for this. Institutional investors may now devote up to 5% of their assets to Bitcoin and other digital currencies under the legislation.
Germany has also been a proponent of digital money in the European Union (EU), of which it is a member. Germany has requested that the EU’s anti-money laundering legislation include digital currencies.
As per Germany and its EU supporters, the legislation would help create confidence in digital money and make it more widespread globally.
The dedication of the nation has received praise from industry watchers. According to a recent Coincub analysis, Germany has deemed the most digital currency-friendly country in Q1 2022. After recent legislative changes, it has eclipsed Singapore, the previous top.