Crypto on margin. Other economic asset or capital gains tax.
February 12, 2022 | 70,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
it is about the taxation of crypto transactions on margin.
The procedure is as follows:
- I deposit a stablecoin like USDC on a decentralized perpetual trading protocol such as https://dydx.exchange/
- I trade various cryptocurrencies long/short on margin, paying transaction fees and an interest rate for the margin credit
- Losses/profits are credited to my USDC balance:
In this case, is it considered trading cryptocurrencies paid for with a loan, therefore taxable as other assets (purchase of a cryptocurrency with a loan), or is it more like trading a type of CFD, taxed as capital gains tax at a flat rate of 25% + solidarity surcharge?
How should I proceed with the tax return if my question has not been clearly regulated so far?
Can I also tax my profits as other assets, taking advantage of the speculation period?
Good day and thank you for using frag-einen.com!
Regarding your question, I would like to share my assessment as follows.
From my perspective, there is no direct trading with any other economic good here, but rather it seems to be a type of CFD trading.
Because you are buying and selling cryptocurrencies indirectly. Therefore, I would consider this more as taxable under CFD-comparable regulations and would declare it as capital income in the KAP attachment.
In my view, the draft of the BMF letter regarding cryptocurrency trading does not provide clear regulations for these transactions. Therefore, as mentioned, I would explain the gains/losses as in CFD transactions and provide the tax office with a note in the main form under "Additional information for the tax return" that you have declared the gains/losses accordingly. In any case, you will likely be asked to disclose the individual transactions, so that the tax office can make an allocation based on the data/information provided.
Unfortunately, due to the partly unclear regulations so far, it is not possible to make a definitive statement on the matter. I hope that I have been able to provide you with an approach to handling this issue.
Best regards!
Knut Christiansen
Tax consultant
