Crypto Tax in Austria: Bitcoin trading, Crypto Mining & crypto Assets taxation
Under certain conditions, income from crypto-assets in private assets for tax purposes must be considered when determining income tax. The taxation depends in particular on the profit generated, as well as the holding period and the type of asset. The following FAQs are intended to provide an overview of the basic taxation of crypto assets. Crypto Tax in Austria: Bitcoin trading, Crypto Mining & crypto Assets taxation. However, the actual taxation depends on the specific circumstances of the individual case. Your TPA experts will be happy to assist you, if necessary.
TPA crypto tax expert Christian Oberkleiner & Christoph Rommer have compiled the 7 key questions and answers for crypto investors that are active with bitcoin trading or crypto mining in Austria. All you need to know on crypto taxes in Austria if you are investing in Bitcoins & Co!
1. Do crypto-assets held as private assets have to be taxed?
To determine income, the acquisition costs including incidental expenses are compared to the sales proceeds, for example from exchange into a FIAT currency, purchase of goods/services with crypto-assets or exchange between crypto-assets. A gain from crypto-assets held as private assets is taxable only in case of a sale within the one-year speculation period, with taxation at the progressive rate of up to 55%; other rules especially apply for Security Tokens.
The following, in particular, are regarded as cryptocurrency sales:
- Exchange for a legal currency (EUR, USD, etc.),
- Purchase of a product or service using the cryptocurrency and
- Exchange of one cryptocurrency for another or for another crypto-asset.
2. How are Security Tokens taxable?
Capital gains and losses from the sale of Security Tokens are classified as income from realized returns of capital assets where no speculation period applies. Such income and capital gains are subject to the special tax rate of 27.5%.
3. Does the purchase/sale of crypto-assets have to be documented?
A complete documentation of all transactions is recommended. If such documentation is not or only partially available, the income may be estimated by the tax authorities.
4. How are rewards from mining taxed?
Mining constitutes a business activity if all requirements for a taxable business (“steuerlicher Gewerbebetrieb”) are met cumulatively. Credited crypto-assets are subject to the progressive tax rate without a speculation period. If the requirements are not met, the income is generally regarded income from other services according to § 29 Austrian Income Tax Act (EStG), where the progressive income tax rate is also applicable. Operating costs or income-related expenses caused by mining may be deducted. Any losses from business activities (not private) may be offset against other income or, if this is not possible, may be carried forward.
5. How are hard forks to be recorded for tax purposes?
In simplified terms, hard forks are a “split” of the blockchain, which creates new crypto assets (coins). According to the Austrian Federal Ministry of Finance (BMF), the acquisition date of the existing crypto assets is also relevant for the new coins, whereby the acquisition cost of the new coins is zero. In the case of private assets, the full proceeds from the sale of the new coins are therefore taxable if sold within the continued one-year speculation period.
6. How is Staking and Lending taxed in Austria?
Staking and Lending is generally not a business activity, but the rewards are classified as income from other services according to § 29 Austrian Income Tax Act (EStG), which is taxed at the progressive rate of up to 55%. If the rewards from Staking and Lending are held for more than one year, the sale of the rewards from the private assets is tax-free.
However, the BMF is of the opinion that especially in the case of lending – i.e. the transfer of crypto-assets to a third party, thus a “crypto-based loan” – a so-called “interest-bearing asset” with income from capital assets may exist. According to this view, both the received rewards (“interest”) and capital gains are subject to taxation at a 27.5% special income tax rate, regardless of a speculation period.
7. Are mining as well as purchases and sales of crypto assets subject to VAT?
Mining is generally either not subject to VAT due to the lack of an identifiable recipient of the service or, in the case of verification of an explicit transaction for transaction fees, subject to VAT but tax-exempt. According to ECJ case law, the exchange of a fiat currency into crypto assets and vice versa, constitutes a VAT-exempt transaction and there is no input VAT deduction.
If you realize through the above that you may not have included all income from crypto assets in your tax return in the past after all: We have experience in remediating the tax history of crypto assets through proper disclosure to the tax authorities.
Do you have any questions that have not been answered in the FAQs on cryptocurrencies and need a crypto tax advisor in Austria?