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Crypto Credit Card Tax in Germany: Every Payment Is a Disposal
Germany's tax authority confirmed every crypto card payment is a disposal. The one-year holding period, 1,000-euro threshold and record-keeping rules apply.
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The German Federal Ministry of Finance settled a question that had lingered for years. A circular published March 6, 2025 confirms that using a crypto credit card to buy a coffee, pay a subscription or settle a grocery bill counts as a disposal of the underlying asset. No minimum threshold applies. Even a four-euro payment must be recorded, dated and linked to an acquisition history.
For tax purposes the card issuer acts as your agent in selling crypto at the moment of payment. Whether the provider liquidates Bitcoin, Ether or a stablecoin to cover the euro amount makes no difference to the classification. The Income Tax Act, Section 23(1) sentence 1 no. 2, covers any sale, swap or use as a means of payment. The circular makes clear that the mechanism does not alter the tax event.
Gains remain exempt if more than 12 months passed between acquisition and disposal. The period runs to the day from the purchase date. Staking or lending during that window does not extend the holding period to ten years – the BMF confirmed that point explicitly. Anyone earning yield on a crypto balance between card payments should track the original acquisition date separately.
The exemption threshold in Section 23(3) is widely misunderstood. It is not an allowance. If total gains from all private disposal transactions in a calendar year – including gold sales, not just crypto – stay below 1,000 euros, no tax is due. The first euro over that line makes the entire sum taxable. Card users who make hundreds of small payments can easily cross the threshold without realising it, because each transaction produces a gain or loss of only a few cents or euros. Clean records are the only way to know where you stand before filing.
For fungible tokens the first-in-first-out rule applies. The oldest holdings are spent first. In a bull market those are the cheapest, so each card payment realises a larger gain than if you could choose which lot to sell. The rule also works the other way: old coins often sit outside the one-year holding period, making the gain tax-free. The combination means you cannot optimise after the fact.