On July 20, 2019 the German tax court for the federal states of Berlin and Brandenburg published the first decision of a German tax court on the qualification of “bitcoins” in a provisional legal protection procedure.

The court confirmed that a bitcoin qualifies as an “asset” for German taxation and (tax) accounting purposes.

At the same time, the court concluded that a bitcoin is not a security or financial asset because it does not represent a claim for (re)payment of money.

The capital gain derived by a private individual is taxable if realized within one year after the acquisition (that is, a disposition after one year would not be taxable).

The German Generally Accepted Accounting Principles (GAAP) applicable to intangible assets apply to bitcoins if held as a business asset.

Read more about the decision in our recent client alert.