The German Ministry of Finance in coordination with the highest financial authorities of the federal states decided whether the tax-free holding period for cryptocurrency staking and lending should be a minimum of a decade. On May 11, the Ministry of Finance declared that it has published a letter on the income taxation of the crypto validating officially that the sale of a crypto asset is tax-free after a year even if the coins are utilized for lending and staking.

According to a statement by the Ministry, this is the first-ever initiative that will bring nationwide uniform administrative law on the matter in Germany.

The stance is an outcome of the hearing that happened in 2021 where several stakeholders and cryptocurrency associations expressed concerns over the tax-free holding period of cryptocurrency staking and lending. The letter deals with and addresses the issues mentioned below.

The letter deals with several crypto issues which are technically classified and explained as per the income tax law. Also, the letter offers crypto individual taxpayers and businesses legally safe and simple applicable guidance on the income tax treatment of digital currencies and other tokens. Additionally, it deals with the selling and buying of ether or bitcoin, specifically mining or block creation in bitcoin.