On 6 March 2024, the German Ministry of Finance (MOF) released revised draft guidance concerning the compliance and documentation criteria for transactions involving virtual currency and tokens. This comes after the issuance of a final decree in May 2022 regarding income tax treatment, which lacked guidance on compliance and documentation. The current draft updates a previous version from July 2022 and is open for public comments until 3 April 2024, expected to apply to all ongoing cases. Once finalized, it will merge with the May 2022 decree, creating a single document for all rules related to such transactions.
The draft emphasizes the need for accurate and complete information, particularly for transactions on centralized and decentralized platforms. It outlines increased compliance obligations for transactions involving foreign platforms and allows tax authorities to estimate income in cases of missing data, without penalizing the taxpayer.
The guidance includes specific requirements for both business and private transactions and highlights the importance of compliance and documentation, though practical challenges may arise, especially for past transactions where data is unavailable or platforms no longer exist.
