Crypto-to-crypto transactions are not taxed in Poland & Germany!

[Nicholas Van Orton]

What do you mean with "etc" what other it applies to?

If that is all true, why not more wealthy crypto and investment Kings move to Germany before they exchange their investments / assets and live a tax free life in Germany?

Something sounds not right with this story?

Maybe because they do NOT hold their scam, ejem, crypto "investments" for over a year? As, like in many other European jurisdictions (Spain, Portugal, for example), you must hold your investments/securities for 1+ years (some countries 3 and some 5), before they make sense from a taxation point of view.

 

[SoNewToAllShit]

So if I understand all this correctly, then the way to get crypto out tax free is as follows:
I send my crypto into a new wallet, document the date and time for it, make an invoice for the amount, it could be from a UK LTD which I let go bankrupt within 1 year again. Moves to Germany after 1 year, exchanges my cryptocoins for EURO - stays in Germany and uses my tax-free money to live for- or, I establish a company in the UK, Swiss or something, deposit the money there, and buy a house, car or boat. All tax free?

Can this be true

 

[clemens]

I read you @SoNewToAllShit - it's like a wet dream

 

[ih8socialism]

So if I understand all this correctly, then the way to get crypto out tax free is as follows:
I send my crypto into a new wallet, document the date and time for it, make an invoice for the amount, it could be from a UK LTD which I let go bankrupt within 1 year again. Moves to Germany after 1 year, exchanges my cryptocoins for EURO - stays in Germany and uses my tax-free money to live for- or, I establish a company in the UK, Swiss or something, deposit the money there, and buy a house, car or boat. All tax free?

Can this be true

Question is, how to prove to the goverment when you bought them and what they accept / understand. I assume you can do some shady stuff with it lol
@Clemen you got some infos what the accept as a proof that you purchase them later on? I still hold to some assets from back to 2014 / 15 and I'm still stuck in Germany, atleast for this year

Sadly the whole concept can not be applied to the whole "building a passive income with DEX" thing.

 

[antani]

If you already own the coins and have some document that can proof when they are bought, and the period is more than 1 year since, then you can exchange them to money tax free in Germany.

Thanks for sharing.

Do you know if for people who relocate to Germany they require also documents to prove the transactions made with the initial cryptocurrency bought with fiat?
For example, if 5 years ago I bought 1 BTC which I traded for other cryptos and now I have 1 BTC and 10 ETH, do they want to see the transactions I made to get those 10 ETH?
Or is it just ok to show the receipt for the purchase of the initial BTC and that I haven't traded it and the 10 ETH for at least 1 year?

In that case it would be great for tax residents in Poland and Cyprus, where crypto-to-crypto trades don't generate tax events: they might trade till the end of the next bull run, convert to stable coins, wait for one year, move to Germany and cash out.

 

[Nicholas Van Orton]

Thanks for sharing.

Do you know if for people who relocate to Germany they require also documents to prove the transactions made with the initial cryptocurrency bought with fiat?
For example, if 5 years ago I bought 1 BTC which I traded for other cryptos and now I have 1 BTC and 10 ETH, do they want to see the transactions I made to get those 10 ETH?
Or is it just ok to show the receipt for the purchase of the initial BTC and that I haven't traded it and the 10 ETH for at least 1 year?

In that case it would be great for tax residents in Poland and Cyprus, where crypto-to-crypto trades don't generate tax events: they might trade till the end of the next bull run, convert to stable coins, wait for one year, move to Germany and cash out.

Interested, too. Asking for a friend, lol...

 

[clemens]

Do you know if for people who relocate to Germany they require also documents to prove the transactions made with the initial cryptocurrency bought with fiat?

they just need that invoice or a document that proof they have bought the coins at this or that date and time.

For example, if 5 years ago I bought 1 BTC which I traded for other cryptos and now I have 1 BTC and 10 ETH, do they want to see the transactions I made to get those 10 ETH?

That I don't know, the advisor just told me the rules and that he would have to look into the wallet to prepare all required documents. I needed to provide the proof of source of funds.

For me it is not a problem.

 

[ImKing]

this thread belongs to mentor group gold - it should not be public!

It's a loophole which will soon be saturated if it stays.

convert to stable coins, wait for one year, move to Germany and cash out.

that is how it sounds to be.. talking to an advisor in taxes would be the true way.

 

[uplana]

Do you know if for people who relocate to Germany they require also documents to prove the transactions made with the initial cryptocurrency bought with fiat?

source of funds will be required. Spoke with a German tax advisor today. Do you have the proof to the source of funds you are all good to go tax free!

 

[antani]

source of funds will be required. Spoke with a German tax advisor today. Do you have the proof to the source of funds you are all good to go tax free!

No problem with the proof of source of funds, but what if someone proves that she bought 10 ETH in 2017 and then shows up in 2023 in Germany with 100 ETH made through trading while living in another country?
I think that if someone has the list of all the transactions that increased the initial 10 ETH to 100 and kept these 100 ETH for at least one year then in theory it should be fine.

talking to an advisor in taxes would be the true way

I agree.

 

[uplana]

The difference is exactly trading crypto on a platform like kraken, if you do so, you will not get it out tax free! Also the crypto's have to be hold in a personal account, not a business account, otherwise it is taxed.

It's pretty simple, you buy or get in exchange of a service or gods 10 ETH in 2017 - you leave them in the wallet, you relocate to Germany in 2022 , you exchange the crypto to fiat tax free.

Nothing more to say!

 

[calnana]

The difference is exactly trading crypto on a platform like kraken, if you do so, you will not get it out tax free! Also the crypto's have to be hold in a personal account, not a business account, otherwise it is taxed.

It's pretty simple, you buy or get in exchange of a service or gods 10 ETH in 2017 - you leave them in the wallet, you relocate to Germany in 2022 , you exchange the crypto to fiat tax free.

Nothing more to say!

Ye but you'd have to live in germany...

Joking aside, combining this with cyprus would be great. Does this germany tax free thing apply to stablecoins? And are there any caveats - I recall a post saying the 1 year turns to 10 years if you hold the coins but use them for staking for example.

 

[antani]

I found the info below on Koinly
https://koinly.io/guides/crypto-tax-germany/

Does this germany tax free thing apply to stablecoins?

Trading with stablecoins​

A stablecoin - like TrueUSD or EURB, is simply a class of cryptocurrency that offers price stability. That's because stablecoins are backed by a reserve asset, usually a stable fiat currency like USD or EUR. The sale of a stablecoin will attract tax if the value exceeds

There is no major advantage or disadvantage between trading with fiat and trading with a stablecoin when it comes taxes. Like with all disposals, stablecoins will attract tax only if they are traded in one year, and if the profit realised exceeds 600€

I recall a post saying the 1 year turns to 10 years if you hold the coins but use them for staking for example.

Staking, under 10 years​

In Germany coins can be sold tax free when they were held for over 1 year. Except they were used to gain additional profit as it is the case with staking. Then the period is extended to 10 years. Any profit made off staked crypto should be declared in your annual tax return as 'other income'.

 

[uplana]

What is new in your last post? @antani

 

[antani]

What is new in your last post? @antani

Nothing new, I just reported the answers to the @calnana 's questions found on Koinly.

On Koinly there is a nice summary about taxation on crypto in Germany; here it is:

You'll pay Income Tax when you:
- get paid in crypto;
- mining and staking;
- sell, swap or spend crypto if you have held for less than one year and you gain more than 600 euro;
- stake crypto and sell within 10 years.

 

[volcanotnt]

I got it confirmed yesterday from an account.

If you already own the coins and have some document that can proof when they are bought, and the period is more than 1 year since, then you can exchange them to money tax free in Germany.

It means, relocating to Germany to cash out your cryptocurrency can be well a ultra valuable way of avoiding taxes on your crypto.

The tax advisor also said, it doesn't matter how long you have lived in Germany, theoretically you relocate to Germany, cash out your coins, and can move on to the next country.

As I understand it, it will not be feasible to move back to the country you came from since they will tax you. But you could use the money for investment in another project.

@clemens Can I ask also please - could you PM the name of the tax advisor please? also the original message would be fine.

 

[calnana]

Nothing new, I just reported the answers to the @calnana 's questions found on Koinly.

On Koinly there is a nice summary about taxation on crypto in Germany; here it is:

You'll pay Income Tax when you:
- get paid in crypto;
- mining and staking;
- sell, swap or spend crypto if you have held for less than one year and you gain more than 600 euro;
- stake crypto and sell within 10 years.

So usdc would be treated the same as btc or eth.

But doesn’t this also mean that if you’ve ever staked (maybe even lent or used defi) your crypto/stabelcoins then it’s 10 years?

 

[Risehigh]

Working yes, but proof of funds isnt easy. And imagine they find a dex transaction or similar you did no declare = fucked.
Not as easy as it seems

 

[antani]

But doesn’t this also mean that if you’ve ever staked (maybe even lent or used defi) your crypto/stabelcoins then it’s 10 years?

It should be checked with a tax advisor but I think it should be only on the coins you are staking: if you have 2000 UST and are staking 1000, then on those 1000 it's 10 years; on the other 1000 it's 1 year.

But then again, if for example by the end of 2022 someone stops staking and swapping and moves her coins to wallets, in 2023 does nothing, in the beginning of 2024 it will be more than one year just holding the coins (this can be proved checking the wallet on the blockchain explorer) and decides to move to Germany : will the German taxman care about what you did with your coins in 2022 and before when you are not a German ciitizen and never been a tax resident in Germany?
No problem with the proof of source of funds for the purchase of the initial coins.

 

[calnana]

It should be checked with a tax advisor but I think it should be only on the coins you are staking: if you have 2000 UST and are staking 1000, then on those 1000 it's 10 years; on the other 1000 it's 1 year.

But then again, if for example by the end of 2022 someone stops staking and swapping and moves her coins to wallets, in 2023 does nothing, in the beginning of 2024 it will be more than one year just holding the coins (this can be proved checking the wallet on the blockchain explorer) and decides to move to Germany : will the German taxman care about what you did with your coins in 2022 and before when you are not a German ciitizen and never been a tax resident in Germany?
No problem with the proof of source of funds for the purchase of the initial coins.

Yup makes sense, but as you said still check with a professional on the ground.