Private investors with stocks, fund units and other regulated investment products in their custody account rarely come into contact with the tax office – the banks pay the withholding tax for them and, if necessary, offset profits against losses.

It is completely different with investments in cryptocurrencies . While these were previously a niche phenomenon, the steep rise in the price of Bitcoin, Ether, Ripple and Co. has also encouraged other investors to buy. Some retailers even advertise that you can pay with virtual “money” from them.

But: The money holdings in virtual currencies are legally treated neither as a (foreign) currency nor as an investment, but as other economic goods. However, profits and losses from cryptocurrencies can still be relevant for the tax return.

If, for example, Bitcoins are sold at a profit within the one-year period, these are speculative profits that are subject to the regular income tax rate. From the point of view of the tax office, it makes no difference whether this capital gain arises through exchange, when shopping or on the stock exchange. 

Anyone who has invested in a virtual currency should therefore document the acquisition process. Because in order to determine the taxable amount, you need the acquisition costs. To simplify matters, the “first-in-first-out” method (FIFO) can be used here: It is then assumed that the coins acquired first are also sold first.

The good news: Profits can be offset against losses from other speculative transactions in the same year. The costs of the business reduce the profit or increase the loss. And if there is still a tax profit, an exemption limit applies.