If (other) assets of a private estate are acquired and sold within the one-year “speculation period”, a so-called private disposal transaction may exist. This does not apply to the sale of items for everyday use. The extent to which virtual currencies (currency tokens) have economic property and the sale or exchange from the cryptocurrencies leads to a private disposal transaction was clarified by the BFH in its ruling of February 14, 2023, AZ no. IX R 3/22.
In the disputed case, the investor acquired, exchanged and sold various cryptocurrencies. More specifically, these were privately conducted transactions with Bitcoins, Ethereum and Monero. In the year in dispute 2017, the investor generated a total profit of EUR 3.4 million from these transactions. The tax office treated the gains from the sale and exchange of various cryptocurrencies as a private disposal transaction and made them subject to taxation. The BFH ultimately took the same view.
Subsequently, virtual currencies (so-called currency tokens or payment tokens) represent a "different economic asset". The term "asset" is to be interpreted broadly. In addition to goods and rights, it also comprises actual conditions as well as concrete possibilities and advantages, the acquisition of which is costly for the taxpayer and which are accessible to a separate, independent valuation according to the market perception. Such requirements are met in the case of virtual currencies. Bitcoin, Ethereum and Monero are to be regarded as means of payment from an economic point of view. They are traded on trading platforms and exchanges, have a market value and can be used for payment transactions to be settled directly between participants. Technical details of virtual currencies are not relevant for their status as economic goods. Acquisition and sale or exchange of the tokens within one year therefore constitute private disposal transactions, the gains or losses of which are subject to taxation.
In the opinion of the BFH, such taxation is also constitutionally unobjectionable. There is no so-called structural enforcement deficit put forward by the investor and opposing taxation. Rather, the implementation deficit would have to be inherent in the regulation itself or frequent or even systematic violations would not have to be consistently punished and prevented. With regard to private sales transactions with virtual currencies, there are neither contradictory legal norms designed to be ineffective nor structurally contradictory collection regulations, nor are there any indications that the tax authorities are unable to determine or record the resulting gains or losses. The fact that in individual cases taxpayers manage to evade taxation when trading in cryptocurrencies despite all investigative measures of the tax authorities (e.g. in the form of collective information requests) cannot justify a structural enforcement deficit.
Notice:
With this long-awaited decision, the BFH follows the prevailing opinion in the literature, which categorizes virtual currencies as "other" economic assets. While the decision only concerns Bitcoin, Ethereum and Monero, it is likely to be relevant for other cryptocurrencies as well.
If there are private disposal transactions within the one-year period, however, these are only taxable in the asset management sector if the profit exceeds EUR 600. In contrast, commercial miners are always subject to taxation with their income - regardless of holding periods and income levels.