Anyone who holds cryptocurrency such as Bitcoin or Ether and is considering leaving Germany often encounters two opposing assumptions: that emigration has no consequences for crypto assets because German exit tax (Wegzugsteuer) only concerns GmbH shares, or that a “crypto exit tax” threatens every increase in value. Both fall short. How cryptocurrency is actually taxed on emigration depends on whether the crypto assets are held as private or business assets, how long they have already been held, which country the person moves to and which double taxation treaty exists with that country. The key provisions are above all Section 6 of the German Foreign Tax Act (Außensteuergesetz, AStG), Section 23 of the German Income Tax Act (Einkommensteuergesetz, EStG) and extended limited tax liability under Section 2 AStG.
Not a Case for Section 6 AStG: Why Exit Taxation Does Not Apply to Directly Held Crypto Assets
So-called exit taxation under Section 6 AStG is familiar to many investors and is often hastily applied by crypto holders to their own situation. In fact, Section 6 (1) AStG only covers shares in corporations (GmbH, AG, UG) within the meaning of Section 17 EStG, that is, from a shareholding of at least 1 %. If the shareholder moves their residence abroad and their unlimited tax liability thereby ends, the shareholding is treated as if it had been sold at fair market value (gemeiner Wert), even though no actual sale takes place. Under the partial income method, 60 % of the increase in value is taxable. The requirement is that the shareholder was subject to unlimited tax liability for at least seven years within the last twelve years (Section 6 (2) AStG).
Directly held crypto assets, whether in the holder’s own wallet, on an exchange or with a broker, are not shares in a corporation. They are therefore not covered by Section 6 AStG, regardless of how large the increase in value is or how long the coins have already been held.
The situation is different if crypto assets are held through a corporation, for example through a holding GmbH set up specifically for this purpose. In that case, it is not the crypto assets themselves but the shares in this company that are subject to exit taxation, provided that the 1 % shareholding threshold is reached. Since the revision by the ATAD Implementation Act (applicable to emigrations from 2022 onwards), the former unlimited, interest-free deferral for moves to the EU or the EEA no longer exists. On application, the tax assessed for the year of emigration can be paid in seven equal annual instalments, as a rule only against the provision of security (Section 6 (4) AStG). If the shareholder returns within seven years (the period can be extended on application), the tax claim lapses subject to further conditions (Section 6 (3) AStG). Anyone who holds their crypto assets through a corporation should therefore have this structure reviewed in good time before a planned emigration.
The Actual Legal Basis: Crypto Sales as Private Sales under Section 23 EStG
For directly held crypto assets held as private assets, the relevant provision for tax purposes is not Section 6 AStG but Section 22 no. 2 in conjunction with Section 23 (1) sentence 1 no. 2 EStG. Crypto assets are treated as “other assets” within the meaning of this provision; the Federal Fiscal Court (Bundesfinanzhof, BFH) confirmed this in its judgment of 14 February 2023 (IX R 3/22). Their sale is taxable if no more than one year elapses between acquisition and sale. After this one-year period has expired, a sale is not taxable. Since the 2024 assessment period, gains from sales within the period have been subject to an exemption limit of 1,000 euros (Section 23 (3) sentence 5 EStG, previously 600 euros). If it is exceeded, the entire gain is taxable, not just the excess.
A widespread misunderstanding concerns staking and lending. It was argued in isolated cases that using crypto assets as a source of income extends the holding period under Section 23 (1) sentence 1 no. 2 sentence 4 EStG from one to ten years. The Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) already rejected this interpretation in its circular of 10 May 2022 and confirmed its position in the BMF circular of 6 March 2025 (“Individual questions on the income tax treatment of certain crypto assets”, para. 63): for currency or payment tokens such as Bitcoin and Ether, even use for lending or staking does not extend the holding period to ten years. Special rules apply to other tokens (utility tokens, security tokens). This is important for emigration planning, because otherwise the period in which a sale is taxable would be considerably longer.
A distinction must be made between the taxation of the sale of the coins (Section 23 EStG) and the taxation of ongoing income from staking or lending: income received must generally be recognised at market value at the time of receipt as other income under Section 22 no. 3 EStG (exemption limit of 256 euros per year). The coins received in this way are at the same time deemed to have been newly acquired and have their own one-year period for a later sale. A separate end of the holding period must therefore be determined for each crypto position. The general principles for calculating deadlines on emigration are explained in more detail in our article on the speculation period under Section 23 EStG on emigration.
Emigration and Limited Tax Liability: The Gap in Section 49 EStG
If unlimited tax liability ends with emigration, the follow-up question arises: is a later sale of crypto assets subject to limited tax liability under Section 1 (4) in conjunction with Section 49 EStG? Limited tax liability only covers the domestic income exhaustively listed in Section 49 (1) EStG. Private sales of “other assets” such as crypto assets are not included in this catalogue. In this respect, Section 49 (1) no. 8 EStG only covers sales of German real estate and rights equivalent to real estate, and Section 49 (1) no. 2 (e) EStG only covers the sale of shares within the meaning of Section 17 EStG.
A gain from the sale of Bitcoin or Ether within the one-year period is therefore generally not taxable in Germany for a person resident abroad who is only subject to limited tax liability in Germany, regardless of where the wallet or exchange is maintained. Sales after the one-year period has expired are not taxable in any case. There is, however, one special rule: extended limited tax liability under Section 2 AStG.
Extended Limited Tax Liability under Section 2 AStG
Section 2 AStG extends limited tax liability, until the end of ten years after the end of the year of emigration, to all income that would not be foreign income within the meaning of Section 34d EStG under unlimited tax liability. The provision only applies if all of the following requirements are met:
- As a German national, the person was subject to unlimited income tax liability for at least five years in the last ten years before the end of unlimited tax liability.
- They are resident in a foreign territory in which they are only subject to low taxation within the meaning of Section 2 (2) AStG, or are not resident in any foreign territory.
- They continue to have substantial economic interests in Germany, for example an entrepreneurial interest, a shareholding of at least 1 % in a German corporation, non-foreign income of more than 62,000 euros or more than 30 % of total income in the calendar year, or assets whose income would not be foreign of more than 154,000 euros or more than 30 % of total assets (Section 2 (3) AStG).
In addition, the legal consequence only arises if the total income subject to limited tax liability exceeds 16,500 euros in the calendar year (Section 2 (1) sentence 3 AStG).
The scope of the provision is decisive: Section 2 AStG does not create a new taxable event. It only covers income that would also be taxable if unlimited tax liability had continued. Sales of crypto assets after the one-year period has expired are therefore not taxable via Section 2 AStG either. Gains from sales within the one-year period are affected.
For these gains, the question arises whether they are “non-foreign”. Under Section 34d no. 8 (b) EStG, gains from private sales are only foreign income if the assets sold are situated in a foreign country. As decentrally maintained assets, crypto assets have no clear location. There is therefore much to be said for gains from their sale within the one-year period falling under Section 2 AStG as non-foreign income, regardless of where the wallet or trading platform is maintained. This has not been clarified by the supreme courts. Anyone who meets the requirements of Section 2 AStG must therefore expect gains from crypto sales within the one-year period to remain taxable in Germany despite emigration.
Protection under a Double Taxation Treaty
Protection against Section 2 AStG may result from a double taxation treaty with the new country of residence. If the person is resident in the new country of residence under the treaty, most treaties allocate the right to tax gains from the sale of movable private assets to that state. If the treaty contains no subject-to-tax clause (Rückfallklausel) and no overriding taxation (überdachende Besteuerung) in favour of Germany, treaty protection generally takes precedence over the domestic rule in Section 2 AStG.
A special rule applies in relation to Switzerland: under Article 4 (4) of the Germany-Switzerland treaty, Germany may continue to tax persons without Swiss nationality who were subject to unlimited tax liability in Germany for a total of at least five years on income from Germany and on assets situated in Germany in the year of emigration and in the five following years, notwithstanding the other treaty rules. This provision specifically safeguards extended limited tax liability under Section 2 AStG. Whether gains from crypto assets without a location “derive from Germany” in this sense has not been clarified. Anyone who wants to sell crypto assets before the end of the one-year period within this time frame should therefore not rely on treaty protection.
Anyone who is taxed in Switzerland on the basis of expenditure may, under Article 4 (6) of the Germany-Switzerland treaty, not be treated as resident there; treaty protection then no longer applies. In addition, such preferential taxation generally constitutes low taxation within the meaning of Section 2 AStG. The foreign tax regime must be examined by an adviser in the respective country.
Unclear legal position: obtain a binding ruling. Where the tax assessment in Germany is not certain or is foreseeably subject to change, an application to the tax office for a binding ruling (verbindliche Auskunft, Section 89 (2) of the German Fiscal Code, AO) belongs before implementation. It binds the tax office to the assessment given for a precisely defined set of facts that has not yet been realised, and it is subject to a fee. In our view, a tax adviser who does not recommend this in such a situation is acting irresponsibly: the client risks having to litigate over the outcome years later, and that costs time and money.
Mining, Forging and Crypto Assets Held as Business Assets: When Emigration Has the Effect of a Sale
A separate group of cases concerns crypto assets that are attributable not to private asset management but to a commercial business. In the view of the Federal Ministry of Finance, block creation through mining or the holder’s own forging (active staking as a validator) is not private asset management. It is commercial if it is carried on on a sustained basis and with the intention of making a profit; otherwise, the income must be taxed as other income under Section 22 no. 3 EStG (BMF circular of 6 March 2025, paras. 34 to 45). By contrast, passive staking, in which crypto assets are merely delegated to a third-party validator, is treated as drawing income from one’s own assets (Fruchtziehung) within private asset management and covered by Section 22 no. 3 EStG (para. 48). The distinction must be made in the individual case and depends on the extent of the holder’s own activity, its sustained nature and participation in general economic activity.
If crypto assets are attributable as business assets to a sole proprietorship, a partnership or a corporation, it is not Section 23 EStG that applies on emigration but general exit taxation of business assets (Entstrickung). If Germany loses its right to tax the hidden reserves in the crypto assets as a result of the entrepreneur’s emigration or the relocation of the place of management, this is treated as a sale at fair market value under Section 4 (1) sentences 3 and 4 EStG (sole proprietorships, partnerships) or Section 12 (1) of the German Corporate Income Tax Act, KStG (corporations). Here too, tax is payable without an actual sale having taken place and without any liquidity having been received.
The BMF treats crypto assets as non-depreciable tangible assets (BMF circular of 6 March 2025, para. 41). The permanent establishment to which they are to be allocated after emigration is determined by the relevant people functions (Section 1 (5) AStG, the German Ordinance on the Attribution of Profits to Permanent Establishments). If the business is managed from abroad in future, the crypto assets generally follow it there, even if mining hardware remains in Germany.
In the case of a relocation to an EU or EEA state, a compensation item under Section 4g EStG can be formed on application for individual assets subject to exit taxation, which is released over five years, increasing profit. If the entire business is relocated (Section 16 (3a) EStG), the tax can be paid in five annual instalments on application (Section 36 (5) EStG). These reliefs are not available for a move to a third country. Exit taxation on a relocation, independently of crypto assets but on the same legal basis, is covered in our article on moving a company’s registered office abroad.
Reporting Obligations for Crypto Service Providers from 2026 (CARF, DAC8)
Additional reporting obligations have applied since 2026. The Common Reporting Standard previously relevant for the automatic exchange of information (see CRS reporting obligations for foreign accounts) generally does not cover crypto-asset service providers, as these usually do not fall under its concept of “financial institutions”. This gap is closed by the OECD’s Crypto-Asset Reporting Framework (CARF), which the EU has transposed into Union law with the DAC8 Directive.
In Germany, the Crypto Assets Tax Transparency Act (Kryptowerte-Steuertransparenzgesetz, KStTG) of 22 December 2025 implements these requirements: providers of crypto-asset services (trading platforms, certain wallet providers and brokers) must record their users’ transactions for the first time for the 2026 calendar year and report them to the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) by 31 July of the following year. Breaches of the due diligence and reporting obligations can be punished with fines of up to 50,000 euros, and breaches of the recording and retention obligations with fines of up to 10,000 euros (Section 18 (2) KStTG). The first exchange of data between states will follow in 2027.
The assumption that crypto holdings on foreign platforms remain hidden from the German tax authorities therefore no longer holds. Anyone planning to emigrate or who has already done so should fully document their crypto history (acquisition dates, acquisition costs, transaction histories). The same documentation is also decisive for the taxation of cryptocurrency in an estate.
Checklist: Cryptocurrency When Moving Abroad
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| Step | Content | Typical timing |
|---|---|---|
| 1. Inventory | Allocate all crypto positions to private or business assets; document acquisition dates, acquisition costs, wallet addresses, transaction IDs and timestamps | Before planning begins |
| 2. Section 6 AStG check | Clarify whether crypto assets are held through a corporation | Before the change of residence |
| 3. One-year periods | Determine the end of the one-year period under Section 23 EStG for each position, record staking and lending income separately | Ongoing |
| 4. Section 49 EStG check | Confirm that private crypto sales are not part of the catalogue of limited tax liability | Before emigration |
| 5. Section 2 AStG check | Compare the five-out-of-ten-years criterion, low taxation, substantial economic interests and the 16,500-euro limit; only sales within the one-year period are affected | Before emigration |
| 6. Treaty analysis | Examine the treaty position with the destination country, in particular subject-to-tax clauses and overriding taxation | Before emigration |
| 7. Business assets | For mining or forging, clarify the distinction between commercial and private, examine exit taxation under Section 4 (1) EStG or Section 12 KStG | Before emigration |
| 8. Compensation item / instalments | For a relocation to the EU/EEA, examine an application under Section 4g EStG or Section 36 (5) EStG | In the year of relocation |
| 9. Notification and reporting obligations | Examine Section 138 (2) AO for the period before emigration; factor in reports by crypto service providers under the KStTG | Before emigration |
| 10. Proof of residence | Document actual residence in the destination country, in particular under special tax regimes | After emigration |
On step 9: notifications under Section 138 (2) AO only concern taxpayers with a residence, habitual abode, registered office or place of management in Germany, for example regarding foreign companies through which crypto assets are held. Directly held crypto assets are not subject to notification under this provision; the obligation ceases after emigration.
Example
Example: Laura has held Bitcoin and Ether in her own wallet for several years, with part of it passively staked through an exchange, and is considering moving to a country with low income tax. She holds no shares in corporations, so Section 6 AStG does not apply. After emigration, sales within the one-year period would generally no longer be taxable, because Section 49 EStG does not cover them; sales after the one-year period has expired are not taxable in any case.
If, however, Laura meets the requirements of Section 2 AStG, for example because, as a German national, she was subject to unlimited tax liability for at least five of the last ten years, moves to a low-tax territory and retains assets of more than 154,000 euros in Germany (for example a let apartment), gains from crypto sales within the one-year period remain taxable in Germany until the end of ten years after the end of the year of emigration, even though the coins are held and sold abroad. Sales after the one-year period has expired remain non-taxable. Only a prior review of the treaty position and of her own economic ties to Germany makes the tax consequences of emigration predictable.
Conclusion
For directly held crypto assets, moving abroad does not trigger exit taxation under Section 6 AStG, because this provision is limited to shares in corporations. What matters is the one-year period under Section 23 EStG, the lack of a domestic connection within the meaning of Section 49 EStG and extended limited tax liability under Section 2 AStG. The latter can keep gains from sales within the one-year period taxable in Germany for up to ten years after the year of emigration; it does not cover sales after the one-year period has expired. For crypto assets held as business assets, exit taxation of business assets also comes into play. With the reporting data under CARF and DAC8 from the 2026 calendar year, crypto holdings abroad are becoming visible to the tax authorities.
Frequently Asked Questions
Is exit tax payable on Bitcoin when emigrating?
Not for directly held crypto assets. Section 6 AStG only covers shares in corporations from a shareholding of 1 %. If the crypto assets are held through a GmbH, however, the GmbH shares are subject to exit taxation.
Are crypto sales taxable in Germany after emigration?
Generally not, because private sales of crypto assets are not part of the catalogue of limited tax liability in Section 49 EStG. Extended limited tax liability under Section 2 AStG can be an exception. However, it only covers sales within the one-year period.
Does staking extend the speculation period to ten years?
Not for currency or payment tokens such as Bitcoin and Ether. The BMF clarified this in its circulars of 10 May 2022 and 6 March 2025. The staking income itself must be taxed on receipt as other income under Section 22 no. 3 EStG and starts its own one-year period.
When does extended limited tax liability under Section 2 AStG apply to crypto assets?
The requirement is that a German national was subject to unlimited tax liability for at least five years in the last ten years, moves to a territory with low taxation and retains substantial economic interests in Germany. The income must exceed 16,500 euros in the calendar year. Only crypto sales within the one-year period are covered; a treaty can offer protection, but only to a limited extent in relation to Switzerland.
Will the tax office find out about crypto holdings abroad?
Increasingly, yes. Under the Crypto Assets Tax Transparency Act, crypto service providers must report their users’ transactions to the Federal Central Tax Office for the first time for the 2026 calendar year. Via CARF and DAC8, such data will also be exchanged between states from 2027.
Attorney Dr. Johannes Fiala and the firm have published extensively on exit taxation and international tax law and advise clients on the tax classification of crypto assets in connection with emigration, from the distinction between Section 6 AStG, Section 23 EStG and Section 2 AStG to examining the treaty position with the destination country. Please get in touch with the firm without obligation to discuss your plans in an initial consultation.
