Miners and node operators
A trade beyond a certain scale, but often below the bookkeeping thresholds. Block rewards, transaction fees, electricity costs and hardware all come together here.
Sec. 4(3)
Service · Legal position 08/2026
Cash-basis accounting with crypto, and VAT
The cash-basis computation looks simpler than a balance sheet. With crypto it is not — because the central question, when purchased coins reduce the profit, has still not been conclusively resolved.
The essentials
- The receipts and payments principle in section 11 EStG applies: rewards are recorded when credited, at the price then prevailing.
- On the administrative view, acquisition cost for crypto is not deductible immediately but only on sale or withdrawal.
- We think that needs clarification: goods and gold bars held as current assets are deductible immediately — crypto is not named in the list in section 4(3) sentence 4 EStG.
- Anyone seeking immediate deduction has to think through the loss restriction in section 15b EStG.
- Mining hardware is depreciated; for VAT on NFTs, what is actually supplied decides.
Who uses the cash-basis computation
As long as no obligation to keep full books applies, it is available — and generally the better choice.
Freelancers paid in crypto
Anyone supplying services and paid in crypto assets has business income equal to the market value when it accrues — whether or not it is ever exchanged into euros.
Small trading businesses
The obligation to keep books arises only on exceeding the turnover or profit thresholds in section 141 AO, or on registration as a merchant. Until then the cash-basis computation suffices.
Whether your activity amounts to a trade at all is often unsettled. That is a separate assessment. Trade or private asset management
Receipts and payments: the most common error
The cash-basis computation follows section 11 EStG: income is recorded when received, expenditure when paid. For crypto assets that has a consequence which is regularly overlooked.
A reward is received at the moment it is credited — valued at the price of that moment, not at the year-end price and not on the later sale. With daily distributions that produces several hundred valuations a year, each to be recorded individually.
The later sale is a separate event. If the price has fallen in the meantime, a loss arises against the value recorded on receipt; if it has risen, an additional gain. Collapsing the two produces a result that is wrong both as to timing and as to amount.
What follows in practice
- Fix a price source, document it, and stay with it.
- Record the time of receipt for each credit rather than aggregating into monthly totals.
- Allocate business expenses by date of payment too, particularly electricity instalments and balancing payments.
- Keep the ten-day rule in section 11 EStG for regularly recurring payments in view.
Are purchased coins deductible immediately?
The central open question here — with a substantial effect on the profit of the year of acquisition.
Authorities
The administrative view
Acquisition cost for crypto assets is said not to be deductible when paid, but only when the sale proceeds are received or the coins are withdrawn. In effect that treats crypto like securities and non-depreciable fixed assets.
The practical consequence: someone buying 200,000 euros' worth during the year and selling nothing reduces their profit by not a single cent.
Doubts
Why we think this needs clarification
Section 4(3) sentence 4 EStG contains a named list: non-depreciable fixed assets, shares in corporations, securities and comparable unsecuritised claims and rights, and land and buildings held as current assets. Crypto assets are not named in it.
For ordinary current assets — goods as much as gold bars — immediate deduction on payment remains the rule. Where crypto assets are held as current assets and are neither a claim nor a right, there is much to be said for treating them the same way.
This is our own legal view. It departs from the administrative position and has not, so far as we can see, been resolved by the highest court.
What this means for you: anyone wanting to raise the point should document the facts cleanly from the outset — the allocation to current assets, the intention of short-term disposal, and the payment dates. The assessment can then be kept open. The appeal procedure
The restriction in section 15b EStG
Anyone considering immediate deduction needs to know this provision — it was created for exactly these constellations.
Section 15b EStG restricts the use of losses from tax deferral schemes: they may not be offset against other income, only against later profits from the same source. The loss is not lost — it is locked in time.
Subsection 3a: the gold trading rule
This subsection was introduced in response to arrangements that systematically generated losses through the immediate deduction of current assets in a cash-basis computation — the gold trading cases being the well-known example. It catches precisely the situation of a taxpayer not obliged to keep books acquiring current assets and thereby producing immediately deductible expenditure.
For crypto assets that means: achieving immediate deduction does not dispose of the section 15b question, it raises it. What decides is whether there is a scheme-like arrangement or an economically motivated transaction of the ongoing business.
Alongside this, the threshold in subsection 3 applies, under which the restriction bites only above a certain ratio of projected losses to capital employed. The two subsections have to be examined separately.
Our position on this: we do not build schemes. Where immediate deduction is in play, the point is the correct application of the statute to a business that actually exists — not a construct whose purpose is tax deferral. That distinction is also where an audit will start.
Hardware, electricity and the asset schedule
Unlike the coins, the operating assets follow the familiar rules — which makes the boundary easier to draw.
Mining hardware
Computers, graphics cards and accessories are depreciable fixed assets written off over their useful life. Low-value assets may be deducted immediately. The asset schedule forms part of the Anlage EÜR form.
Electricity costs and private use
Where mining takes place in a private household, the business share must be established and evidenced — through a sub-meter or a traceable estimate. Without an apportionment the deduction will be cut in an audit, and generously so.
Rooms and premises
A room used for the business may be deductible; the conditions differ according to whether it is a home office within the meaning of the rules or a room used for business purposes.
Moving to full accounts
Once the thresholds in section 141 AO are exceeded, a switch to a balance sheet is required. The transitional profit must be computed — and with crypto assets not previously deducted it can be substantial. Crypto accounting
VAT, and NFTs in particular
The area of greatest uncertainty — and of the most expensive mistakes, because VAT can hardly be passed on retrospectively.
Exchanging legal tender for cryptocurrency is exempt on the case law of the European Court of Justice. That does not answer every question a business faces.
With NFTs, what is actually supplied decides
An NFT is not a single set of facts. What is sold is sometimes a digital work, sometimes a right of use, sometimes access to a community, sometimes a combination. That determines whether there is an electronically supplied service, where the place of supply lies, and whether the recipient is a taxable person — which with anonymous wallet addresses is rarely ascertainable.
Further questions that arise regularly
- Are mining rewards within the scope of VAT where no identifiable recipient of a supply exists?
- How are platform fees and marketplace commissions to be treated?
- When does the small business scheme apply, and what happens on exceeding its threshold?
- How is the taxable amount determined where payment is made in crypto assets?
These questions belong before the supply, not after it. Anyone who has made a taxable supply without accounting for VAT bears the tax economically — passing it on to anonymous buyers afterwards is impossible.
Questions and answers
Can I use the cash-basis computation as a miner?
Yes, as long as no obligation to keep full books applies. That obligation arises only on exceeding the thresholds in section 141 of the Fiscal Code or on registration as a merchant. Until then the cash-basis computation under section 4(3) of the Income Tax Act is available — and it is usually considerably less work.
Are purchased coins deductible immediately as a business expense?
On the administrative view, no: the acquisition cost is said to be deductible only when the sale proceeds are received or the coins are withdrawn. We think the point needs clarification, because section 4(3) sentence 4 EStG contains a closed list in which crypto assets are not expressly named — unlike securities, for instance. For ordinary current assets such as goods or gold bars, immediate deduction applies.
What is section 15b EStG about?
The provision restricts the offsetting of losses from tax deferral schemes. Subsection 3a was introduced to stop arrangements generating losses through the immediate deduction of current assets in a cash-basis computation — known from the gold trading cases. Anyone seeking immediate deduction for crypto has to think this restriction through as well.
How is mining hardware treated?
Differently from the coins: computers and accessories are depreciable fixed assets and are written off over their useful life. For low-value assets, immediate deduction is available. Any private use must be accounted for and documented.
Do I have to charge VAT on NFTs?
That depends on what is actually being supplied. Selling an NFT can be an electronically supplied service; the place of supply and the status of the recipient then matter. Practice is inconsistent, and the assessment turns on the contractual arrangement and the platform. We look at this before the sale, not after.
What is the most common error in crypto cash-basis accounts?
Mixing up receipts with changes in the holding. Rewards are recorded as business income when they accrue, at the price then prevailing — not on sale and not at the year-end price. Collapsing the two produces a result that is wrong both as to timing and as to amount.
Responsible for content: Matthias Steger, German certified tax advisor (Steuerberater), nine years as a tax auditor, author of the handbook on the taxation of crypto assets.
Legal position: 25 August 2026. Sources: sections 4(3), 11 and 15b of the Income Tax Act; section 141 of the Fiscal Code; the VAT Act; and the Federal Ministry of Finance circulars on the income taxation of crypto assets.
The passages on immediate deduction reflect our own legal view; it departs from the administrative position. This page is not advice on an individual case. Where this English text and the German version differ, the German version governs.
Legal position: 25 August 2026. Sources: sections 4(3), 11 and 15b of the Income Tax Act; section 141 of the Fiscal Code; the VAT Act; and the Federal Ministry of Finance circulars on the income taxation of crypto assets.
The passages on immediate deduction reflect our own legal view; it departs from the administrative position. This page is not advice on an individual case. Where this English text and the German version differ, the German version governs.