ETN Contract Terms Can Determine Which German Crypto Tax Rule Applies

German crypto investors face two separate €1,000 tax provisions, and the rights written into an exchange-traded note can determine whether its sale falls under investment-income or private-sale rules.

The saver’s allowance reduces the amount of qualifying capital income subject to tax by up to €1,000 per individual, or €2,000 for spouses assessed jointly. Those amounts apply to capital income; a taxpayer cannot also deduct actual income-related expenses against the same income.

A withholding agent, such as a bank, can apply the allowance before withholding tax if it has a valid exemption order. In specified cases, a non-assessment certificate can also prevent withholding. If tax has already been withheld and the allowance was not fully used, the taxpayer may request an assessment through a tax return. The statutory rate for qualifying capital income is 25%, subject to exceptions and adjustments.

The private-sale provision measures a different amount: total gains from qualifying private sales during the calendar year. The exemption applies only when that combined total is below €1,000. A total of €999 is below the limit; a total of exactly €1,000 is not exempt under this rule. It does not provide a €1,000 deduction from a larger gain.

Privately held crypto-assets may fall within the rule when sold one year or less after acquisition. That period includes a sale made exactly one year after purchase. The test applies to combined qualifying private-sale gains for the calendar year, rather than giving each asset its own €1,000 limit.

An exchange-traded note (ETN) does not automatically qualify as investment income simply because it is held in a securities account. Its contract rights determine how its sale may be classified. A bond that gives the holder only a claim to delivery of a fixed quantity of crypto held by the issuer, or a claim to proceeds from the issuer’s sale of that crypto, may be treated as a nonfinancial claim. Selling such a bond may therefore fall under private-sale rules; different rights may produce a different classification.

The two €1,000 figures remain separate. An unused saver’s allowance cannot be added to the private-sale threshold, and the private-sale test does not reduce capital income. For any individual ETN, the relevant question is what rights its terms grant.