Legal regulation of cryptocurrency in Germany in 2020
Before starting a business it is recommended to get acquainted with the peculiarities of cryptocurrency regulation in Germany in 2020. This country was one of the first to launch legal regulation to make funds legitimate. There are some licensing and issuing requirements.
Features of the cryptocurrency business in the country
In 2011, cryptocurrency was classified as a financial instrument. Cryptocurrency is included in the categories of settlement unit and special financial instruments. Two years later the guidance on cryptocurrency was issued. The German Ministry of Finance issued a corresponding regulation according to which Bitcoin became a unit of account for trading operations.
In 2017, adjustments were made to the IPA, and working with the cryptocurrency in Germany involves doing business with a financial instrument. As a result of the recognition of transactions with virtual funds, changes were made to the tax law. The transaction may be subject to an income tax rate.
The mining of cryptocurrency is not subject to VAT collection and the tariff for capital increase. Income tax is applied to mining. Transactions, which were carried out between legal entities, are considered taxable.
Opening a company and obtaining a licence
Using cryptocurrency instead of cash to participate in the economic cycle of a business is an activity that does not require a cryptocurrency licence. Some currency transactions may require appropriate authorization under the laws of the country.
For cryptocurrency trading in Germany, cryptocurrency exchange opens in 2020. They cryptocurrency companies may be registered in Germany, and the opening process is relatively simple. Legal entities are recognized as financial companies and require a permit to operate fully.
To open a firm for cryptocurrency in Germany, it is important to meet the following requirements:
- The size of the authorized capital must be at least 730 thousand euros;
- Reporting is required;
- The presence of a registered office in the jurisdiction is mandatory.
Commercial platforms buying and selling cryptocurrency must be authorized. Authorization is also required if the commercial platform manages the trading one.
Nuances of working with cryptocurrency in the country
Virtual money is recognized as a financial instrument in the country. There is no general prohibition on the issue, possession and sale of such currency. However, there are requirements to obtain a permit and issue. If less than a year has elapsed between the purchase and sale of a currency, the sale transaction must be subject to an income tax. The taxable minimum is 600 euros.
To open a cryptocurrency exchange you must obtain a permit. The process is much easier than in other EU countries. When planning to open a cryptocurrency company, please contact our specialists at IT-OFFSHORE. We will offer consultation and answer all your questions.