Paid in Bitcoin: How to Tax Crypto Income as a Self-Employed Freelancer

If you accept a fee in Bitcoin as a freelancer or a trader, two separate tax events arise from it, and the second one surprises most people. The first is the inflow: the fee is perfectly ordinary business income, valued at the euro equivalent on the day it reaches you. The second is everything that happens to those coins afterwards. And that is exactly where something different applies to you than to a private investor, because the familiar one-year holding period does not apply to business assets. This text answers the question for Germany, along the lines of the Income Tax Act, the VAT Act and the two relevant circulars of the Federal Ministry of Finance. It does not replace advice in an individual case, but it shows you which questions to put to your tax adviser and what to document yourself before the first invoice goes out. Bitcoin as a fee: why the inflow is perfectly ordinary business income Business income is any accrual of assets in money or money's worth that is occasioned by the business. Bitcoin falls under "money's worth", not under money, and the whole treatment follows from that. For tax purposes, the form of payment does nothing to change the fact that you performed...