A. Introduction
On January 1, 2026, the Crypto Asset Tax Transparency Act (KStTG) will take effect, bringing far-reaching changes to the entire crypto market. The aim of the law is to increase tax transparency in the area of digital assets. It transposes the provisions of the EU DAC8 Directive into national law and thus follows a Europe-wide trend toward combating tax evasion and money laundering in the context of cryptocurrencies.
B. New Obligations for Crypto Service Providers
I. Reporting and Due Diligence Obligations
1. Crypto service providers, including trading platforms, wallet providers, and even certain DeFi projects, will be required to fulfill extensive reporting and due diligence obligations starting January 1, 2026.
2. The information to be reported includes, in particular:
a) Users’ crypto holdings,
b) all purchases and sales,
c) wallet transfers,
d) exchanges between different crypto assets,
e) users’ personal data (e.g., name, address, tax ID, date of birth).
3. Requirement for Qualified Self-Disclosure: Users must provide the platform with accurate information regarding their personal details and tax status. The platforms are obligated to collect, verify, and forward this self-disclosure to the tax authorities.
II. International Cooperation Among Tax Authorities
1. As part of the international exchange of information under DAC8, the collected data is transmitted to the tax authorities of other EU member states as well as third countries.
2. The rationale behind this obligation is to ensure seamless tracking of tax-relevant transactions involving crypto-assets across national borders.
C. Tax and Criminal Tax Law Risks for Investors
I. Tax Risks
1. Investors are required to properly report all tax-related transactions involving cryptocurrencies to the tax authorities.
2. The platforms’ comprehensive reporting obligations mean that violations of reporting requirements or the concealment of crypto income can be detected immediately.
II. Criminal Tax Law Consequences
1. Failure to report or the deliberate concealment of income from crypto transactions may constitute tax evasion under § 370 AO.
2. The data sharing enabled by the KStTG provides tax authorities with substantial grounds for initiating tax audits and criminal tax proceedings.
3. The risk of searches and criminal investigations increases significantly.
D. Need for Consultation and Recommendations
In light of the significant legal changes in the area of cryptocurrency taxation and the associated criminal risks, early consultation regarding tax law and criminal tax law is strongly recommended. Any ambiguities regarding your own tax obligations in connection with cryptocurrencies or uncertainties regarding the correct reporting of tax-relevant transactions should be clarified in a timely manner to minimize the risk of criminal tax proceedings and corresponding sanctions.
Do you have questions regarding the new legal landscape for cryptocurrencies, or have uncertainties arisen regarding your tax obligations? Do you require advice regarding tax or criminal tax law risks associated with your cryptocurrency investments?
As specialized attorneys in tax law and criminal tax law, we are happy to provide you with personalized advice.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.