Cryptocurrency trading is becoming more and more internationally known and frequent. This also applies to Germany, which meant that the Federal Fiscal Court (Bundesfinanzhof, BFH) had to deal with the issue as to whether the sale or exchange of cryptocurrencies constitutes a taxable private sale transaction.

The issue was triggered by a taxpayer who traded in various cryptocurrencies, some of which he bought and resold within a short period of time. In the view of the tax authorities, this trad-ing gave rise to taxable profits.

The BFH agreed with this view. A cryptocurrency is an asset. In addition to objects and rights, an asset also comprises actual conditions, possibilities and advantages, the acquisition of which entails a cost for the taxpayer and which are accessible to a separate, independent valuation. Technical details are also not relevant for its status as an asset. Accordingly, a tax liability arises on profits from the sale of cryptocurrencies such as Bitcoin, Etherum or Monero if they are bought and resold within one year.

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