Taxation of cryptocurrencies

Nov 24, 2021 Benn-Ibler Rechtsanwälte

The planned eco-social tax reform for 2022 has been supplemented by another important aspect, namely the taxation of cryptocurrencies. A brief overview of essential innovations:

As of March 2022, income from cryptocurrencies will be added to the list of income from capital assets. Central to this is the newly created Section 27b of the Income Tax Act (Einkommenssteuergesetz, EStG), which is intended to describe cryptocurrencies and the income from them more precisely.

Paragraph 4 leg cit provides a legal definition. The term corresponds to that of virtual currencies, as it is already used at the European and national level. According to this, it is a digital representation of a value that has neither been issued by a central bank nor is linked to a legally established currency. However, it is accepted as a medium of exchange.

Income from cryptocurrencies is divided into current income according to Sec. 27b para 2 EStG, as well as realised increases in value according to para 3 leg cit.

Current income includes:

• Remuneration for the provision of cryptocurrencies
• Income generated for building blocks (mining).
• This does not apply to the acquisition of cryptocurrencies for no or only insignificant consideration, or where services for transaction processing consist of the use of existing cryptocurrencies (staking).

Income from realised increase in value is primarily income from sale against the euro (as well as any other legally recognised foreign currency), or from exchange for other assets or services. However, the exchange of cryptocurrencies for other cryptocurrencies is not taxed. The difference between the proceeds of the sale and the acquisition costs is to be recognised.

Income from cryptocurrencies is to be subject to the special tax rate of 27.5 percent. This also allows for loss compensation with other capital income subject to this special tax rate, such as shares.

Cryptocurrencies acquired by the end of February 2021 at the latest are exempt from these planned regulations.

158/ME, XXVII. GP (08.11.2021)