Tax it correctly: your digital wallet in the tax return

At the end of March, it is that time again: the deadline for filing your tax return is approaching fast. Have you also invested in digital assets such as cryptocurrencies or non-fungible tokens (NFTs)? Then there are a few things you should keep in mind to avoid unpleasant surprises.

Strictly speaking, not mentioning cryptocurrencies in your tax return is considered tax evasion. Anyone who has invested in Bitcoin, Ethereum and other cryptocurrencies must declare their value as assets in the list of securities on their tax return - under “other assets”. The taxable value corresponds to the rate on 31 December of the tax year.

Do I have to pay tax on any gain in the value of the Bitcoin currency?

No, capital gains from private investments do not have to be taxed. These are tax-free, similar to profits from share prices. However, this does not apply if, as a professional trader, you trade with larger amounts of borrowed capital. You would have to declare such profits from price increases as income.

When trading via online platforms, fees are charged for each transaction. These costs that trading entails cannot be deducted from taxes. The situation is different with any custody fees. Crypto storage costs may be claimed as deductions.

Mining and taxes

The so-called mining of cryptocurrencies may be taxable. If you earn income through mining, this falls under self-employment. This means you have to pay income taxes on it. It is important to consider any tax obligations associated with mining and seek professional advice if necessary.

Taxation of non-fungible tokens (NFTs)

You may have heard of so-called non-fungible tokens (NFTs). They represent unique digital goods such as digital art, music or even digital land in virtual worlds. How are they taxed? Since NFTs are considered personal movable assets, they are tax-free as such as long as you keep them private. But take care: if you sell within a year of purchasing and make a profit, this may be considered speculative income and taxable.

Cryptocurrency tax tips

• The taxable value of cryptocurrencies corresponds to the closing price on 31 December
• Cryptocurrency mining may be taxable
• NFTs may be taxed as speculative income
• Do not forget to report income from mining and selling NFTs on your tax return