There are two countries in Europe where capital gains on Bitcoin are completely tax exempt. Germany and Portugal.
Hodl der bitcoin!
A German plaintiff tried to argue that his $3.6 million capital gain on the resale of bitcoin was not taxable income. The cologne has lost the case in Germany’s top financial court on February 28.
Capital gains realized on bitcoin are taxable. These earnings must be reported on his income tax return. The applicable rules are those for income from private sale transactions.
This was decided by the Federal Finance Court (BFH), which will now serve as case law. Germany considers that the capital gain on the resale of a Bitcoin less than a year after its purchase is subject to income tax.
On the other hand, these capital gains are exempt from tax if the BTCs are sold after one year, unlike stock market shares.
The decision of the German Federal Court confirms what we already knew. Yes, Bitcoin is taxable, but it pays to be patient…
The German Federal Central Tax Office (Bundeszentralamt für Steuern) has established strict guidelines on the taxation of Bitcoin. The tax rate paid by Teutons is the same as ordinary income tax (up to 45% for the highest tax bracket).
But again, you just have to keep your bitcoins for more than a year to have nothing to pay.
Moreover, Portugal has had the same approach since the end of last year. Capital gains are not subject to tax after one year. Taxation is otherwise at the rate of 28%. It would be a shame…
Despite competition from Germany, Portugal has assets to put forward. In particular a tech scene in the making, an affordable cost of living. Not to mention its good internet connectivity and visa for digital nomads.
Add to that around 300 days of sunshine a year and gorgeous beaches. It is not surprising that many EPs find their home there. You will find them at the Go A Lisboa bar, on the roof of the Portuguese capital…
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