Read the issue terms
The final terms and base prospectus show whether there is a delivery claim and whether the issuer may pay cash instead. The product page is not enough.
Sec. 20 / 23 EStG
Article · as at 10/2026
Crypto ETPs in Germany: taxed like spot or like an ETF?
If you live in Germany and hold a Bitcoin or Ether ETP in your brokerage account, the tax treatment does not follow the product name. It follows the issue terms. Where you have an enforceable claim to delivery of the coins, the tax administration treats the note like coins held directly: section 23 EStG, one-year holding period, tax free afterwards. Where that claim is missing, it is a capital claim under section 20 EStG with the 25 per cent flat tax. This article explains the test, the legal sources and where the law is not yet settled.
Key points
- A crypto ETP traded in Germany is normally a bearer bond, not an investment fund. The Investment Tax Act does not apply to genuine ETPs.
- Section 23 EStG (one-year holding period, €1,000 exemption limit) requires an exclusive, enforceable delivery claim and physical backing.
- Section 20 EStG (25 per cent flat tax, no holding period) applies to cash settlement, swap or futures structures and, as a rule, to index and basket products.
- There is no Federal Fiscal Court ruling on crypto ETPs. The administration transfers the Xetra-Gold case law on gold bonds. The transfer itself is untested.
- German custodian banks often withhold tax on crypto ETNs under section 20 EStG as a matter of course. That may need correcting in your return.
- The distinction loses importance if the holding period is abolished as announced. The current state is below.
What a crypto ETP is legally
ETP is an umbrella term for exchange-traded products: ETFs, ETCs and ETNs. The crypto ETPs listed on German exchanges are bonds issued by the provider, not fund units. That is why single-asset Bitcoin products exist at all: an ETF must meet the diversification rules for investment funds, a single-asset ETF is not permitted in the EU, and crypto assets are not yet an eligible ETF underlying. A fund holding only Bitcoin would also breach the 20 per cent UCITS limit.
For tax this gives a first fork in the road:
- Genuine ETP (bearer bond): only section 20 or section 23 EStG are in play. The Investment Tax Act with its advance lump sum is not.
- Investment fund (for example US spot ETFs or centrally managed crypto trusts): the Investment Tax Act can apply. Then there is no holding period and the partial exemption is zero per cent, because crypto assets are not equity participations. See our article on DeFi and investment tax law.
The rest of this article is about the first group only.
When section 23 EStG applies: a claim to goods, not to money
The administration looks at the claim the bond embodies, not at the product label.
Under margin no. 83 of the Finance Ministry circular of 6 March 2025, the question is whether the bond creates a capital claim within section 20(1) no. 7 EStG or merely a claim to delivery of goods. Margin no. 84 answers it for crypto: if the bond gives exclusively a claim to delivery of a fixed quantity of crypto assets deposited with the issuer, or to the proceeds from their sale by the issuer, there is no capital claim. The Federal Fiscal Court's rulings on Xetra-Gold and Gold Bullion Securities are to be applied accordingly.
Four points to check in the issue terms
- Content of the claim. What is owed must be exclusively delivery of the coins or payment of the proceeds from selling the deposited coins. A separate money claim is harmful.
- Fixed, deposited quantity. The coins must be physically held by the issuer or its custodian. For Gold Bullion Securities the court accepted that the issuer had to invest almost all capital in gold; the issuer must not be free to use the capital otherwise (BFH VIII R 7/17).
- No further capital claim. Interest, or repayment in money regardless of the backing, point to section 20 EStG.
- Who holds the claim. Neither the ministry nor the court says expressly whether the retail investor must be able to demand delivery, or whether it is enough that authorised participants can redeem. Several providers and guides conclude that ETPs without an investor claim fall outside section 23 EStG. That is not decided.
Consequences
- Sale within one year: private disposal under sections 22 no. 2 and 23(1) sentence 1 no. 2 EStG. After one year the gain is tax free. Within the year it stays tax free if all private disposal gains of the year are below €1,000.
- Sale on the exchange: decided for gold bonds: taxable only as a private disposal, not under section 20 (BFH 12 May 2015, VIII R 35/14; 16 June 2020, VIII R 7/17).
- Taking delivery of the coins: redemption against delivery is not a disposal, because the holder only receives what the bond promised (BFH 6 February 2018, IX R 33/17, on Xetra-Gold). The administration assumes the same for crypto.
- Payments by the issuer during the term, such as passed-through staking rewards: other income under section 22 no. 3 EStG, valued when received.
When section 20 EStG applies: a capital claim, like an ETF
Without a delivery claim the default applies: the bond is a capital claim under section 20(1) no. 7 EStG, and the gain on sale or redemption is taxable under section 20(2) sentence 1 no. 7 EStG (margin no. 86). There is no holding period; the 25 per cent flat tax plus solidarity surcharge and church tax where applicable is due even after years. Losses go into the general capital-income loss pot. Your German bank normally withholds the tax itself.
Typical cases
- No delivery claim: the terms provide only for payment in euros, for instance cash settlement at a reference price.
- Synthetic structure: the issuer tracks the price through swaps or futures instead of holding coins.
- Index or basket products: the claim refers to an index or to several crypto assets with changing weights rather than to a fixed quantity.
- Issuer options to pay cash: if the issuer may pay money instead of coins, the purity of the delivery claim is doubtful. Read the terms closely.
| Feature | Crypto ETP with delivery claim | Crypto ETP without delivery claim | Investment fund (e.g. US spot ETF) |
|---|---|---|---|
| Legal form | bearer bond | bearer bond | fund unit |
| Rule | section 23 EStG | section 20 EStG | Investment Tax Act |
| Holding period | one year, then tax free | none | none |
| Rate | your personal rate | 25% flat tax + surcharge, church tax if applicable | 25% flat tax, partial exemption 0% |
| Allowance | €1,000 limit per year (all private disposals) | saver\'s allowance | saver\'s allowance, annual advance lump sum |
| Bank withholds tax | should not; in practice sometimes does | yes | usually no |
| Return form | Annex SO | Annex KAP | Annex KAP-INV |
Legal sources
Administration: Finance Ministry circular of 6 March 2025 on the income taxation of crypto assets, margin nos. 83 to 86 (bonds referencing crypto assets) and 53 (exemption limit).
Case law on gold bonds, applied by analogy: BFH 12 May 2015, VIII R 35/14 and VIII R 4/15 (Xetra-Gold: taxable only under section 23, not section 20); BFH 6 February 2018, IX R 33/17 (redemption against delivery of gold is not a disposal); BFH 16 June 2020, VIII R 7/17 (Gold Bullion Securities: the issuer must invest almost all capital in gold and have no free use of it); BFH 14 February 2023, IX R 3/22 (cryptocurrencies are other assets within section 23 EStG).
Important
As far as we can establish, there is no ruling by the Federal Fiscal Court or any fiscal court on crypto ETPs themselves. Applying the Xetra-Gold line to crypto rests on the administration\'s view. The circular does not bind the courts.
Open questions
- What exactly the delivery claim must look like, especially where the issuer may settle in cash.
- Whether case law on physical gold backing transfers without more to digitally held crypto assets.
- How banks treat the products at source. For Xetra-Gold, banks have not withheld tax since 2016; for crypto ETPs some still apply section 20 EStG.
The German version of this article also discusses a concrete issuer, nxtAssets, whose products are marketed as physically backed with a delivery option for investors. We have not reviewed its final terms and base prospectus in detail; the section 23 classification is a working assumption based on the product information. Read the example (in German).
In practice: crypto ETP or coins on a hardware wallet?
Tax is only part of the decision. Two situations where the wrapper makes the difference: inheritance, and being asked where the money came from.
| Question | Crypto ETP in a brokerage account | Coins on a hardware wallet |
|---|---|---|
| What passes to the heirs? | The bond in the account. The bank re-registers it against a certificate of inheritance or the opened will. | Legally the claim to the coins. Without the seed or private key that is worth nothing; the coins stay where they are. |
| Inheritance tax | Arises on death, valued at the price on the date of death. The bank reports the holding to the tax office. | Arises on death at the same value, even if nobody can access the coins. The only remedies are a valuation reflecting inaccessibility and equity applications; both are laborious and uncertain. |
| What the heirs need | Inheritance papers and the account statements. Proof of purchase sits with the bank. | Seed phrase or private key with instructions, plus the purchase and transaction history, all kept separately from the will, which is opened and read out. |
| Who has already checked the origin of the money? | The bank, under anti-money-laundering rules, when the account was opened and funded. | Nobody, as long as the coins never passed through a regulated exchange. The check comes when you sell, withdraw or are asked. |
| How fast can you prove the origin? | In days: purchase confirmation, statements, tax certificate. | Days to months, depending on the history: exchange records, bank statements for the euro deposits and the chain of transfers to today\'s address. |
| Why it may matter from 2027 | A draft Customs Finance Justice Act (Zollfinanzgerechtigkeitsgesetz) would, according to reports, let customs open an administrative procedure to confiscate assets of unclear origin outside any criminal case, normally from more than €100,000, without needing a criminal suspicion; founded doubts about lawful origin would be enough, with review by the fiscal courts. Status: cabinet 12 August 2026, first reading 9 October 2026, committee hearing 2 November 2026, planned start 1 January 2027. Not yet law, and the reports do not say whether crypto assets are named expressly. Either way: an ETP comes with its paper trail, a wallet does not. | |
| Typical risk | Issuer risk: the ETP is a claim against the issuer. Check how the backing is protected in insolvency. | Losing access while remaining fully taxable; and a seizure you cannot answer without a source-of-funds file. |
More: Inheritance and gifts and Source of funds for banks. Details of the customs bill as reported on 22 October 2026, not official.
Practical steps
Check what your bank withheld
If the bank taxed a crypto ETP under section 20 EStG although section 23 applies, you can correct this in your return, with documents and a reasoned explanation.
Keep records
Purchase date, cost and the issue terms in force, so you can prove the holding period later.
Binding ruling
For larger positions a binding ruling from the tax office under section 89(2) AO can be worthwhile.
Where the holding-period debate stands (23 October 2026)
- Ministry draft of 30 September 2026: crypto assets acquired after 31 December 2026 would be taxed at 25 per cent without a holding period; existing holdings would stay under section 23 EStG. Planned start: 1 January 2027. Our article on the draft and our response.
- Bundestag: the Green party\'s bill was rejected on 8 October 2026 (445 to 132 votes).
- Cabinet: the session expected on 14 October 2026 did not take up the draft, according to the reports available. It remains in inter-ministerial coordination; no new date is known.
- Law today: section 23 EStG applies unchanged until a law is published in the Federal Law Gazette.
For crypto ETPs this means: if you buy now, run both scenarios. Products that fall under section 23 EStG today would also be caught by a new rule for new purchases.
Questions and answers
Is a crypto ETP a fund?
No. Crypto ETPs traded on German exchanges are legally bearer bonds issued by the provider, not fund units. The German Investment Tax Act with its advance lump sum does not apply to them. Genuine fund vehicles such as US spot ETFs are different: there the Investment Tax Act applies with a partial exemption of zero per cent.
When does the one-year holding period apply to a crypto ETP?
When the bond gives you exclusively a claim to delivery of a fixed quantity of crypto assets deposited with the issuer, or to the proceeds from their sale by the issuer. Then, under margin no. 84 of the Finance Ministry circular of 6 March 2025, there is no capital claim and section 23 EStG applies as if you had bought the coins directly.
When is the 25 per cent flat tax due?
When there is no delivery claim: cash settlement at a reference price, swap or futures structures, index or basket products, or issuer options to pay cash instead of coins. The gain is then taxable under section 20(2) sentence 1 no. 7 EStG, with no holding period, at 25 per cent plus solidarity surcharge and church tax where applicable.
My bank withheld tax although the ETP is physically backed. What now?
The bank's withholding is not binding. If the conditions of section 23 EStG are met, you can correct it in your income tax return. You will need the issue terms, the bank's tax certificate and a reasoned explanation.
Has the Federal Fiscal Court ruled on crypto ETPs?
No. The decided cases concern gold bonds such as Xetra-Gold and Gold Bullion Securities. The tax administration transfers that case law to crypto assets. Whether the courts will follow is open; the ministry circular does not bind them.
What changes if the holding period is abolished?
Under the ministry draft of 30 September 2026, crypto assets acquired after 31 December 2026 would be taxed at 25 per cent without a holding period, while existing holdings stay under section 23 EStG. For crypto ETPs with a delivery claim the distinction would then matter less for new purchases. It is not law; the cabinet date of 14 October 2026 passed without a decision.
Author: Matthias Steger, German certified tax adviser, expert witness before the Bundestag finance committee on the DAC8 directive.
Sources: Finance Ministry circular of 6 March 2025, margin nos. 53 and 83 to 86; BFH VIII R 35/14, VIII R 4/15, IX R 33/17, VIII R 7/17, IX R 3/22; the holding period.
As at: 23 October 2026. This is a summary for non-native speakers living in Germany; the German article is the full version. Not individual advice. Graphic: own graphic, bitcoin-tax.de.
Sources: Finance Ministry circular of 6 March 2025, margin nos. 53 and 83 to 86; BFH VIII R 35/14, VIII R 4/15, IX R 33/17, VIII R 7/17, IX R 3/22; the holding period.
As at: 23 October 2026. This is a summary for non-native speakers living in Germany; the German article is the full version. Not individual advice. Graphic: own graphic, bitcoin-tax.de.