Sec. 22 no. 3 / 20 EStG Guide · as at 10/2026

How is crypto lending taxed in Germany?

In short: If you live in Germany and lend privately held crypto, the administration treats the rewards as "other income" under section 22 no. 3 EStG: valued when received, taxed at your personal rate, tax free below €256 a year. Our view depends on what you lend: for stablecoins we consider the income capital income under section 20 EStG at the 25 per cent flat rate; for Bitcoin and other payment tokens the Federal Fiscal Court has to decide (VIII R 22/25, where we represent the claimant). Until then it pays to keep assessments open.

Administration tax administration view Open not settled by the courts Our view our practice's line

The rules step by step

Income when received

Administration Lending income is taxable under section 22 no. 3 EStG; the crypto received is acquired at its market price when received (margin no. 65 of the circular of 6 March 2025). That value is the cost basis of the reward tokens; a later sale is a separate event under section 23 EStG.

Timing and the €256 limit

Margin no. 65 refers to the claiming relief in 48a: the claim date during the year, unclaimed rewards by 31 December. All income from services in a year is added up; at €256 the whole amount is taxable. Timing of rewards in detail.

The lent coins

Administration The ten-year extension of the holding period is not applied to lent currency and payment tokens (margin no. 63). But this rests on an equity concession, not on the statute; it can change.

Other income or capital income?

Open If lending creates a capital claim within section 20(1) no. 7 EStG, the income is capital income at 25 per cent, with the saver's allowance but no deduction of actual costs. The Cologne fiscal court said no on 10 September 2025 (3 K 194/23); the appeal is pending (BFH VIII R 22/25). Our view We represent the claimant. For stablecoins we consider section 20 EStG clearly correct: you lend a value pegged to a currency that works like money. For Bitcoin and other payment tokens we consider a ruling by the Federal Fiscal Court necessary: in BFH IX R 3/22 the court accepted a structural comparability of cryptocurrencies with foreign currencies, which raises the question whether lending them creates a capital claim just as lending foreign currency does. The rate difference can be around twenty percentage points, but it does not always favour the same side; it depends on your rate and costs.

Keep your assessment open

File an objection and ask for the proceedings to be suspended until the court rules. The deadline is one month from notification and cannot be extended. Model objection.

Insolvent platforms

Our view If a lending platform fails, we consider claiming the loss as an expense against the other income. That position is not uncontested but, in our view, defensible.

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Draft your objection with TaxTobi.AI

The next step after reading: an objection that keeps your assessment open. TaxTobi drafts it from the prompt below, distinguishing stablecoins from Bitcoin and payment tokens.

Copy the prompt.
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Draft an objection (Einspruch) against my German income tax assessment concerning the taxation of my crypto lending income. Write the letter itself in German, because it goes to a German tax office, and give me a short English summary of what it says.

My details:
- Tax year: [year]
- Assessment dated: [date], received on: [date]
- Assets lent: [e.g. USDC or Bitcoin], via [platform or protocol]
- Lending income in the assessment: [amount] euros, treated as other income under section 22 no. 3 EStG

Please:
1. Object under section 347 AO to the classification of the lending income as other income.
2. If I lent stablecoins: argue that this is capital income under section 20(1) no. 7 EStG and request the corresponding change.
3. If I lent Bitcoin or other payment tokens: refer to the pending appeal BFH VIII R 22/25 (lower court: FG Köln, 3 K 194/23) and request suspension of the proceedings under section 363(2) sentence 2 AO.
4. Leave placeholders for name, address, tax number and signature.
5. Tell me the deadline (section 355 AO) and which documents I should attach.

Keep it factual and do not raise any other issues.

Open TaxTobi.AI

TaxTobi drafts; you check and send. Replace the parts in square brackets. Do not enter your tax number or name in the chat; add them to the letter afterwards. For your own case, talk to us.

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Questions and answers

Do I have to pay tax on crypto lending income?

Yes. In the administration's view, rewards from lending privately held crypto are other income under section 22 no. 3 EStG at the price when received (margin no. 65 of the circular). Whether they are capital income instead is before the Federal Fiscal Court (VIII R 22/25).

Is stablecoin lending treated the same way?

Not in our view. Lending stablecoins for consideration produces, in our view, capital income under section 20(1) no. 7 EStG at the 25 per cent flat rate. For Bitcoin and other payment tokens we consider a ruling by the Federal Fiscal Court necessary.

Does the €256 limit apply to lending?

Yes, as long as the income is treated as other income under section 22 no. 3 EStG, added together with staking and other income from services. Once reached, the whole amount is taxable.

Does lending extend the holding period of the lent coins to ten years?

Not in administrative practice: the administration does not apply the extension to currency and payment tokens, including when lent (margin no. 63). That is an equity concession, not a statutory guarantee.

Should I object to my tax assessment?

If lending income was taxed, an objection with a request to suspend the proceedings keeps the assessment open until the court rules. The deadline is one month from notification and cannot be extended.

Author: Matthias Steger, German certified tax adviser; counsel for the claimant in BFH VIII R 22/25.
As at: 25 October 2026. Summary for non-native speakers living in Germany; the German guide is the full version, including a worked example. Not individual advice.

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