Profits from trading cryptocurrency subject to tax
Profits from the sale of Bitcoin and other cryptocurrencies are subject to tax. That was the verdict of the Finanzgericht Berlin-Brandenburg in a ruling from June 20, 2019 (Az.: 13 V 13100/19).
Many investors have invested in cryptocurrencies such as Bitcoin. If cryptocurrency is sold again within a year and a profit is made in the process, we at the commercial law firm MTR Rechtsanwälte https://www.mtrlegal.com/en.html note that this is subject to income tax.
Tax liability was confirmed by the Finanzgericht Berlin-Brandenburg in a ruling from June 20, 2019. The legal action was lodged by a married couple that had generated profits in 2017 from trading Bitcoin via a trading platform and declared them in their tax return. The tax office deemed the transaction a private sale and issued an income tax assessment notice. The married couple“s action was unsuccessful.
The Finanzgericht held that Bitcoins constitute an asset that is comparable to a foreign currency, with any profits generated from transactions subject to income tax. Accordingly, the Court went on to note that trading in cryptocurrencies is to be viewed as a private sale and any profits within the speculation period are subject to tax.
It is advisable to maintain detailed documentation when trading in cryptocurrencies. Lawyers with experience in the field of tax law can offer advice.
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