Crypto & taxes: judgment stands

Cryptocurrencies and taxes: Nuremberg tax court confirms tax liability for trading and staking

Bitcoin, Ethereum and co. in the sights of the tax authorities: anyone who trades in crypto assets or generates income through staking must expect a clear tax classification. This is shown by a recent ruling by the Nuremberg Fiscal Court.

Tax liability for private crypto sales

In its ruling dated January 22, 2025 (case no. 3 K 760/22), the Nuremberg tax court decided that sales of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Monero (XMR), Binance Coin (BNB) or WAVES are subject to income tax – provided they take place within the speculation period of one year. The legal basis is Section 23 para. 1 sentence 1 no. 2 EStG. This means that cryptocurrencies are considered “other assets”, the sale of which results in a private sale transaction.

The court clarified that the mere exchange of tokens, for example BTC for ETH, is also taxable – regardless of whether they are exchanged back into euros. The court did not accept the plaintiff’s argument that there was no real performance capability.

Staking, lending & co: taxation of crypto income

In addition to trading, the decision also affects income from staking, lending or comparable crypto services. These are classified – also subject to tax – as other services in accordance with Section 22 No. 3 EStG. This means that anyone who generates passive income by providing tokens must declare this as income in their tax return.

No unconstitutionality – no enforcement deficit

The judges emphasized that the classification of cryptocurrencies as economic assets is constitutional. The court also rejected the argument that there is a “structural enforcement deficit” – i.e. a de facto unenforceability of taxation. Tax law is also able to effectively apply to digital assets.

What this means for taxpayers

The decision affects a growing number of crypto investors and users. Anyone who regularly trades, exchanges coins or generates crypto income should urgently review their tax situation. The tax office can also record taxable transactions retrospectively.

Conclusion

The Nuremberg tax court’s ruling provides legal clarity: crypto income is taxable – regardless of whether it is capital gains or income from staking. For all those who are active in digital assets, this means: document transactions and classify them correctly for tax purposes.

Source: Nuremberg tax court, judgment of 22.1.2025 – 3 K 760/22, final (published in DStR 2025, 1622)

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