Key takeaways
- In all three countries, you owe tax when you sell, swap or spend crypto, with gains treated under capital gains or income tax rules depending on the type of activity.
- The US has no capital gains exemption, the UK allows 3,000 British pounds tax-free, and Germany exempts gains if assets are held over a year or profits are under 1,000 euros.
- Income from staking, mining and airdrops is taxed at personal income rates regardless of country.
- In 2025, exchanges must report crypto activity directly to tax agencies, and late or inaccurate filings can result in heavy penalties.
Do you have to pay tax on crypto?
Cryptocurrency isn’t classified as legal tender by most tax authorities. Instead, it’s typically treated as property or a digital asset, meaning profits from trading, selling or spending crypto are taxable. These profits are usually taxed under capital gains or income tax, depending on the nature of the transaction.
In practical terms, if you dispose of crypto (e.g., by converting it, spending it or swapping it) and it’s worth more than when you acquired it, you’ll owe tax on the gain. If you dispose of it at a loss, that loss may be used to offset other capital gains and reduce your tax bill.
For example:
- Buy $5,000 worth of Bitcoin (BTC), sell it for $10,000 = $5,000 gain → taxable.
- Sell it for $3,000 = $2,000 loss → not taxable, but loss may offset other gains.
Each country applies its own rules, thresholds and deadlines, but the core idea is universal: Crypto gains are taxed when assets are disposed of.
Crypto tax in the US
In the US, the Internal Revenue Service (IRS) treats cryptocurrency as property, not currency. As of 2025, this means every time you sell crypto for fiat, swap one coin for another or use crypto to make a purchase, you’re potentially triggering a capital gain or loss — calculated as the difference between your original cost (cost basis) and the asset’s fair market value at the time of the transaction.
Capital gains tax rates
- Short-term (held ≤12 months): taxed as ordinary income (10%-37%).
- Long-term (held >12 months): taxed at 0%, 15% or 20%, depending on income level.
These rates apply whether you’re selling Bitcoin, swapping Ether (ETH) for USDC (USDC) or using crypto to pay for goods.
From January 2025, crypto exchanges are now required to file Form 1099-DA, disclosing sales and cost basis information to the IRS. So, even if you don’t report your gains, the IRS may already know.
Income tax on crypto also applies to:
- Mining rewards
- Staking payouts
- Airdrops
- Receiving crypto as payment
- Interest from crypto lending platforms.
These are taxed at your marginal income rate (10%-37%) and must be reported on Form 1040.
Forms you’ll need to file
- Form 8949: Report every taxable disposal (gain or loss).
- Schedule D: Summary of capital gains.
- Form 1040: Include both capital gains and crypto-related income.
Taxable and non-taxable events
What’s taxable:
- Selling crypto for USD
- Swapping crypto for another token
- Spending crypto (if it’s appreciated in value).
What’s not taxable:
- Transfers between your own wallets
- Holding crypto without transacting
- Gifts under the $18,000 annual exclusion (2025 limit)
- Donations to qualified charities.
If you missed the April 15, 2025, deadline to file your 2024 crypto taxes and didn’t file an extension, late filing penalties may apply. You still have until Oct. 15, 2025, to submit your return if an extension was requested, but late payments will continue to accrue interest.
Did you know? The IRS has taxed crypto since 2014, when it officially classified digital assets as property via Notice 2014-21, making gains and payments taxable just like stocks.
Crypto tax in the UK
In the United Kingdom, HM Revenue & Customs (HMRC) does not consider crypto to be currency. Instead, it’s classified as a chargeable asset, meaning most crypto transactions fall under capital gains tax (CGT) rules.
If you sold, swapped, or spent crypto during the 2024-25 tax year (which ended on April 5, 2025), you’re required to report those gains in your next Self Assessment tax return — and filing is now open.
CGT thresholds and rates
- The CGT allowance for 2024-25 is 3,000 British pounds.
- CGT is charged at:
- 18% for basic rate taxpayers
- 24% for higher and additional rate taxpayers.
These new rates have been in effect since Oct. 30, 2024, replacing the previous 10% and 20% bands.
Even if your gains fall below the 3,000-pound threshold, you still need to report them — especially if you’ve made multiple disposals. The exemption simply means no tax is due; it doesn’t eliminate the need to file.
Crypto income vs. capital gains
Some types of crypto earnings fall under income tax rather than CGT. These include:
- Crypto received as payment for work
- Mining or staking rewards
- Airdrops (in most cases)
- Frequent trading that resembles a business.
Income tax rates can go up to 45%, depending on your earnings. HMRC has clarified that most individual investors holding crypto long-term will be taxed under CGT rules, but active or professional traders may be classified differently.
How to file your crypto taxes in July 2025
You are now able to file your return for the 2024-25 tax year using HMRC’s online Self Assessment portal.
Deadlines:
- Oct. 31, 2025, if filing by paper
- Jan. 31, 2026, if filing online (this is the more common option).
To report crypto disposals:
- Complete the SA108 Capital Gains Tax supplement
- Attach it to your SA100 Self Assessment return.
If you had taxable crypto gains or income from the 2023-24 tax year and still haven’t filed (the deadline was Jan. 31, 2025), you’re now more than five months late. At this stage, penalties have already started accruing:
- 100-pound fixed fine, with additional daily or monthly penalties after three and six months
- Interest on unpaid tax since the due date
- Possible enforcement if HMRC believes fraud or deliberate evasion is involved.
If you’re behind, it’s best to file immediately to limit further penalties.
Did you know? HMRC estimates non-compliance rates (people not reporting or paying tax on crypto) could be as high as 55%-95%.
Crypto tax in Germany
Germany classifies cryptocurrency as a private asset — similar to real estate or collectibles — not as legal currency. Under Section 23 of the Income Tax Act, profits from crypto are treated as private sale transactions (private Veräußerungsgeschäfte), and they’re only taxable if the crypto is sold within one year of acquisition.
So, if you hold your crypto for over 12 months, any gains from the sale are 100% tax-free — a key advantage of Germany’s tax system for long-term holders.
Short-term gains and the 1,000-euro exemption
If you sell or swap crypto within one year of buying it, any profit is taxed at your personal income tax rate (ranging from 14% to 45%), plus:
- A 5.5% solidarity surcharge
- Church tax, if applicable (8%-9%).
However, there’s a built-in exemption:
If your total private-sale profits (from crypto and other applicable assets) are under 1,000 euros for the calendar year, those gains are not taxable.
This exemption was increased from 600 euros and remains in effect as of July 2025.
Staking and lending: One-year rule still applies
Previously, using crypto for staking or lending extended the holding period to 10 years. But a 2022 clarification from the Finance Ministry removed this condition. As of 2025, all crypto, including staked or lent assets, qualifies for the one-year rule. Hold it longer than a year, and gains are still tax-free.
Income from mining and staking
Crypto earned through mining or staking is treated as income on the day it’s received and is taxed at your personal rate. However, if your total additional income from such activities stays below 256 euros per year, it remains tax-exempt.
This includes:
As always, consult a tax adviser if your activities fall into gray areas like decentralized finance (DeFi) lending or token distributions.
Taxable and non-taxable events
Taxable (if within one year of purchase):
- Selling or swapping crypto at a profit (above 1,000-euro annual threshold)
- Spending crypto on goods or services
- Receiving mining/staking rewards over 256 euros/year.
Non-taxable:
- Selling crypto after holding for 12+ months
- Total gains under 1,000 euros/year from private sales
- Staking or mining income under 256 euros/year
- Wallet-to-wallet transfers.
How to file crypto taxes in Germany
Crypto activity is reported in your annual income tax return (Einkommensteuererklärung). Specifically:
- Use form ESt 1A (main form)
- Include Anlage SO (for private sales income).
You can file online via Elster (Germany’s digital tax portal) or submit paper forms.
Filing deadline for the 2024 tax year (calendar-based):
- July 31, 2025 (if self-filed)
- Extended to Feb. 28, 2026, if you file through a certified tax advisor (Steuerberater).
If you miss these deadlines, penalties and interest may apply — especially if taxes were owed.
Did you know? In Germany, if you’re registered with a church, you pay an extra 8%-9% on top of your income tax as Kirchensteuer (church tax), including on crypto-related gains.
How to stay compliant with crypto taxes in the US, UK and Germany
Whether you’re in the US, UK or Germany, accurate crypto tax reporting comes down to three things: recordkeeping, awareness and timing.
Here’s how to stay compliant:
- Track everything: Keep detailed logs of all buys, sells, swaps and wallet transfers. Note the date, asset, value in local currency and purpose of the transaction.
- Use tax software: Tools like Koinly, CoinTracking and Accointing can automate much of the reporting — especially useful if you’ve made hundreds of trades or used multiple wallets.
- Know what counts as income: Mining, staking, airdrops and payments in crypto are almost always considered taxable income. Declare them accordingly.
- Understand the exemptions:
- US: No CGT exemption, but personal deduction applies.
- UK: 3,000-pound capital gains exemption (2024-25).
- Germany: 1,000 euros gains exemption for private sales, 256 euros for mining/staking income.
- File on time:
- US: April 15, 2025 (extended to Oct. 15 if you filed Form 4868).
- UK: Jan. 31, 2025 (2023-24 year). Next deadline: Jan. 31, 2026.
- Germany: July 31, 2025 (for the 2024 year) — extended if using a tax adviser.
Final reminder: Tax agencies are watching
Crypto isn’t anonymous to tax authorities anymore. In the US, failing to answer “yes” to the crypto question on Form 1040 or omitting taxable gains can lead to audits, fines or even criminal charges. Penalties can reach 75% of the unpaid tax, plus interest.
The UK and Germany are no different. Both countries now require exchanges to report user activity, and intentional non-reporting is treated as tax fraud.
When in doubt, speak with a professional. As crypto tax law changes, staying informed — and staying compliant — is more important than ever.