Obligations for crypto investors to cooperate tightened: This is what the BMF is now specifically calling for

In a letter dated 6 March 2025, the Federal Ministry of Finance (BMF) clarified its position on the taxation of crypto assets and tightened key points. Particular emphasis is placed on the taxpayer’s obligations to cooperate, which have often been underestimated in the past. Anyone who trades in cryptocurrencies or otherwise generates income from digital assets now has a significantly greater responsibility to disclose all tax-relevant information to the tax office in full – regardless of the platform on which the trading took place.

What exactly does ‘duty to cooperate’ mean?

The concept of the duty to cooperate is regulated in Sections 90 et seq. of the German Fiscal Code (AO). In a tax context, it means nothing less than the taxpayer’s obligation to disclose all facts that are relevant for taxation completely and truthfully. In particular, taxpayers are obliged to actively cooperate in clarifying the tax situation in cases involving foreign countries. The tax office is not obliged to conduct its own research or obtain evidence. For cryptocurrencies, this means that taxpayers must document all transactions and processes themselves, prepare them in a plausible manner and be able to provide evidence at any time upon request.

Essentially, the tax office expects a complete breakdown of all transactions, including the date, time, type of transaction (e.g. purchase, sale, exchange, lending, staking, airdrop), the cryptocurrencies involved, the amount, the applicable euro value and the wallets or trading platforms used. In addition, information on transaction fees, the conversion rates used and any special features of the transaction – such as hard forks or lost coins – must be provided. Proof of the origin of the coins is also required, especially for older holdings or anonymous wallet-to-wallet transactions.

The choice of platform makes all the difference

A key concern of the new BMF letter is to differentiate between cooperation obligations depending on the trading platform. Depending on the location and structure of the exchange – whether centralised or decentralised, based in the EU or a third country – the scope of reasonable cooperation obligations varies considerably.

Those who trade with a German provider such as Bison or V-Bank benefit from the fact that these platforms are subject to German regulatory requirements. As a rule, they provide structured transaction records and reports that can be used for tax purposes. For taxpayers, this means that the relevant data is available in a format that is easy for the tax authorities to read, which makes it much easier to comply with cooperation obligations.

The situation is different for foreign, especially non-European platforms such as Binance or Kraken. These providers are not subject to German financial supervision and often lack uniform or complete tax reports. In addition, platforms such as Binance have in the past temporarily restricted or completely discontinued the automatic export of transaction data. Anyone who fails to back up their data there in good time runs the risk of losing important documents, with the result that the tax office may estimate the basis for taxation. In such a case, the full responsibility lies with the taxpayer. The BMF expressly emphasises that no one can claim that ‘the data was no longer available’. Anyone who trades on third-country platforms consciously chooses a more complex obligation to cooperate and bears the risk in case of doubt.

EU platforms such as Bitpanda operate in a grey area. They are also subject to regulatory requirements – such as the upcoming EU MiCA regulation – but do not always provide data that can be used for tax purposes in the German format. Values often have to be converted manually, fees added retrospectively or staking income documented separately. Here, too, the taxpayer is obliged to cooperate, even if the platform is willing to cooperate in principle. Here too, the taxpayer is obliged to cooperate, even if the platform is fundamentally willing to cooperate.

Tax processing is even more challenging for decentralised platforms such as Uniswap or PancakeSwap. There is no central authority, no customer support and no tax report. Those who rely on their own wallets and DeFi protocols must be able to track, document and interpret transactions on the blockchain themselves. Without the appropriate technical knowledge or specialised tracking tools such as CoinTracking or Accointing, this can become an almost impossible task. In such cases, the tax office will take a very close look and make an estimate if there is a lack of transparency or contradictory information.

Consequences of violating cooperation obligations

If a taxpayer fails to comply with their obligations to cooperate, for example because they are no longer able to reconstruct transactions, cannot provide evidence of origin or exchange values, or provides contradictory information, this has serious consequences. In such cases, the tax office may estimate the basis for taxation in accordance with Section 162 of the German Fiscal Code (AO). In cases of doubt, the estimate is not made in favour of the taxpayer. In addition, tax benefits may be revoked, for example when applying the one-year speculation period under Section 23 of the Income Tax Act (EStG). In serious cases, such as intentional concealment or gross negligence, there may also be criminal tax consequences, including the initiation of criminal proceedings for tax evasion.

Conclusion: Document early on and archive systematically

The new BMF letter makes it clear that the tax treatment of crypto assets is not just a question of correct valuation or deadlines, but also – and above all – a question of complete documentation. Taxpayers who trade in cryptocurrencies are well advised to document all transactions in a timely manner, back up their data regularly and, in case of doubt, seek professional assistance. Those who trade on platforms with inadequate data structures bear a higher risk – both tax and legal. The obligation to cooperate does not end with the completion of the tax return, but begins with the first transaction.