The fact that fundamental deviations from the grammatical – as literal – interpretation of the law are possible is shown by case law and a consecutive letter from the Bavarian State Office for Taxes on Foreign Currency Loans. This letter covers the extension of time limits for fixed-term deposits in foreign currencies. In this context, it was questionable whether interest received, which could be considered income pursuant to § 23 (1) no. 2 sentence 4 EStG, could lead to an extension of the deadline. However, since the interest does not originate from the independent asset foreign currency, but rather from the capital claim denominated in foreign currency, a decision was taken against the application of the said provision.
Master Nodes, Staking, Mining, Bounties etc. – What is the remuneration actually paid for?
The block rewards and transaction costs received are remunerations for the services provided. Using the example of master nodes, the payments received are not justified by the original deposit; the user receives payments for the provision of services and functions. In the case of staking and mining, the income is also not generated by the respective coin; rather, in the case of mining and staking, block determination is the decisive factor for the receipt of the block reward. For this reason, the asset can also be viewed separately from the remunerated service in the case of crypto currencies. The payments which the taxpayer receives for his services in the respective systems are therefore not a result of the private asset crypto currency but rather a payment for the system services provided.
Conclusion – no extension of the deadline for cryptoassets?
Taking into account the arguments set out above, an extension of the speculation period by revenues from cryptoassets should regularly be unfounded. The extension of the deadline is to be understood as an anti-abuse provision, which was also born out of a concrete tax savings model. Since crypto currencies are not subject to a substance-related decline in value, it is impossible to design them as a tax-saving model. In addition, potential returns in many cases are not attributable to the use of the asset, but to system-related service offerings.
With significant investment amounts it is however quite advisable from risk aspects to obtain a legally binding information in accordance with § 89 AO before beginning the activity.
Klaus HimmerKlaus Himmer is managing director and co-founder of 21 Consulting (CryptoTax). He is an expert in the field of taxation of blockchain-based assets. As a consultant for a large auditing company, he advised banks, capital management companies and other financial service providers on product and corporate taxation issues.