Memecoins Treated as Cryptocurrencies in Germany: Tax Rules Clarified

The tax rules for selling memecoins in Germany as of 2026 have been clarified by the Federal Ministry of Finance. Memecoins, such as Dogecoin and Shiba Inu, are treated as cryptocurrencies and subject to the same tax rules as more well-known assets like Bitcoin and Ether.

When selling a memecoin for profit within one year of purchase, it may be considered a private sale transaction under § 23 of the Income Tax Act. The one-year holding period is crucial in determining whether the profit is taxable. If more than twelve months pass between acquisition and sale, any profit made is usually tax-free.

For example, if an investor buys memecoins for €2,000 on January 10 and sells them for €7,000 on June 1 of the same year, the profit would be taxable since less than a year has passed between the purchase and sale. However, if the sale occurs after the one-year holding period, the profit would generally be tax-free.

The tax-relevant transactions include selling memecoin for euros, exchanging it for another cryptocurrency, or using it to buy goods or services. Exchanging one cryptocurrency for another is considered a disposal of the given cryptocurrency and an acquisition of the received cryptocurrency.

The exemption limit for profits from private disposals is €1,000 per calendar year. This means that if the total profit from all private disposals remains below this limit, it remains tax-free. If the limit is reached or exceeded, the entire taxable profit can be assessed.