United Arab Emirates: crypto taxes when leaving Germany

• Disposals: No income tax for individuals, so no tax on crypto gains, regardless of holding period, trading frequency, or size of the gain.
• Mining, staking, lending, liquidity mining, airdrops, hard forks: Since no income tax is levied on individuals, the income stays untaxed, regardless of the timing of receipt, market value, or holding period. Anyone carrying out crypto activity on a scale requiring a commercial license (large-scale professional mining, trading for third parties, say) leaves the tax-free private sphere; the excess profit is subject to the 9 % corporate tax.
• Method and filing: For private individuals, FIFO, LIFO, or average price doesn't arise, since without a taxable gain there's no calculation of gain. No separate registration obligation, for lack of personal income tax.
• VAT (5 %): Transferring ownership of virtual assets and their conversion are exempt, retroactively to 1 January 2018; custody and management since 15 November 2024. Not exempt: to the extent the service is provided for an expressly charged fee (trading fee, commission; 5 % still applies there), and mining, which the Federal Tax Authority excluded from the exemption.
• Wealth and inheritance: No capital gains tax, wealth tax, or inheritance tax for individuals.
• Free-zone company (Qualifying Free Zone Person): 0 % on Qualifying Income. Holding crypto assets as an investment has expressly counted since an FTA clarification of May 2024, with no upper limit on the amount; active trading, lending, and staking need to be checked case by case. Non-qualifying income: 9 %, once it exceeds AED 375,000; if it additionally exceeds 5 % of total revenue or AED 5 million, the 0 % status is lost retroactively for the affected tax period. Small Business Relief (revenue up to AED 3 million, taxable income of zero can be declared) only up to and including 31 December 2026, as of today with no extension announced.
• Sole proprietorship: Can't obtain Qualifying Free Zone Person status.

Year of departure

• Unlimited German tax liability only ends once residence and habitual abode are actually given up. Without a DTT, the tie-breaker cascade is missing: if the German home still exists at the time of a sale, the gain stays taxable in Germany. Recommended: actually and demonstrably give up the German home before a sale.
• Anyone bringing substantial economic ties to Germany below the thresholds (roughly: below 30 % or €62,000 for income, below 30 % or €154,000 for assets) doesn't fall under § 2 AStG.
• If the ties continue, the location question decides. Self-custodied Bitcoin: under the state-of-residence argument (Haufe, Winheller), the gains would be foreign income outside § 2 AStG (what matters is control over the private key, not the exchange's registered seat); the law firm LHP (Dr. Ingo Heuel) would disagree. Lending with a provider in a third state: § 34d no. 8(c) EStG more likely applies; whether the same applies to the later sale of the coins deployed is open. There's no settled answer, no court ruling, and no nationwide administrative directive.
• Planning note: consider transferring crypto assets held for more than a year (the sale triggers no German tax under § 23 EStG) to a newly formed UAE free-zone company, or acquiring future crypto assets through it; a sole proprietorship is conceivable too. Distributions to a private individual resident in the UAE are foreign income under § 34d EStG, outside § 2 AStG. Genuine substance is needed, otherwise it risks being classified as an abusive arrangement under § 42 AO; controlled-foreign-company taxation (§§ 7 et seq. AStG) needs to be checked. Neither a BMF circular nor case law confirms the structure.

First year after leaving

• Without substantial economic ties to Germany, the position is clear: neither Germany nor the UAE taxes the crypto gains. With such ties, everything depends on the location question, and the status should be reassessed annually.

More than ten years

• Nothing changes over time for income tax purposes. On the German side, though, something significant does change: extended limited tax liability is time-limited and ends ten years after the end of the year in which unlimited tax liability ended; after that, only ordinary limited tax liability remains, which requires a domestic source of income (current position).
• Without an inheritance tax treaty, German extended unlimited inheritance tax liability applies for German nationals if the deceased or donor was fully taxable in Germany within the last five years before the inheritance; after more than ten years, this window has closed.

Moving on to a third country

• The UAE triggers no tax. Extended limited tax liability is reassessed annually: moving to a country that isn't a low-tax country and where the person is taxed normally can end it for that period; moving to another low-tax country, it generally continues to apply.

Returning to Germany

• Extended limited tax liability ends automatically; unlimited tax liability applies again. The original acquisition cost and acquisition date remain decisive: if a position has been held for longer than a year in total, a later sale is tax-free under § 23 EStG, regardless of whether, and for how long, extended limited tax liability applied in the meantime.