How Are Bitcoin and Cryptocurrencies Taxed in Europe?

If you hold Bitcoin or any other cryptocurrency and you live in Europe, you have tax obligations — and they’ve become a lot more defined since the early days of crypto. Governments have moved from vague guidance to concrete rules, and a new EU-wide reporting directive that took effect in January 2026 means the days of flying under the radar are firmly over.

This article covers how crypto is taxed across the major European countries, what events trigger a tax liability, and what the new EU reporting framework means for you.

The Big Picture: How Europe Classifies Crypto

Across Europe, the consensus is that cryptocurrency is property, not currency. That means buying, selling, swapping, spending, or earning crypto can all be taxable events — much like dealing in stocks or real estate.

The two main income types that come up in almost every country are:

• Capital gains — profit from selling or swapping crypto you already held
• Ordinary income — crypto received as payment for services, from mining, staking, or airdrops

Which bucket your activity falls into determines your tax rate, and the difference can be significant.

What Counts as a Taxable Event?

This is where a lot of investors get caught out. Taxable events aren’t just cashing out to euros. Depending on your country, the following typically trigger a tax liability:

• Selling crypto for fiat currency (EUR, USD, etc.)
• Trading one cryptocurrency for another (e.g. BTC to ETH)
• Using crypto to pay for goods or services
• Receiving staking rewards
• Receiving mining income
• Receiving airdrops
• Receiving crypto as payment for work

France is a notable exception here — crypto-to-crypto swaps are not taxable until you convert to fiat. Most other European countries treat them as taxable disposals.

DAC8: The EU Reporting Directive That Changes Everything

Starting January 1, 2026, the EU’s DAC8 directive requires all crypto-asset service providers — exchanges, brokers, custody platforms — to collect and report transaction data on EU-resident users to national tax authorities. That data is then shared automatically between EU member states.

In practical terms: if you have an account on any regulated European exchange, your transaction history is being reported to your country’s tax authority. The days of crypto existing in a reporting grey area are over.

DAC8 operates alongside MiCA (the Markets in Crypto-Assets regulation), which governs how crypto firms operate and obtain licenses across the EU. MiCA doesn’t change how you’re taxed — DAC8 does, by giving authorities the data they need to enforce the tax rules that already exist.

Crypto firms must have their reporting systems fully compliant by July 1, 2026. The first reports covering fiscal year 2026 are due between January and September 2027.

Country-by-Country Breakdown

Spain

Spain has one of the more detailed crypto tax frameworks in Europe, and it has been significantly updated in recent years.

Capital gains from selling or swapping crypto are taxed as savings income (renta del ahorro) at progressive rates:

• Up to €6,000: 19%
• €6,000 – €50,000: 21%
• €50,000 – €200,000: 23%
• €200,000 – €300,000: 27%
• Over €300,000: 30% (increased from 28% under Ley 7/2024, effective January 2025)

Crucially, crypto-to-crypto trades are taxable events in Spain. Trading BTC for ETH, for example, requires you to calculate and declare the gain — even if no fiat ever changed hands. Gains are calculated using the FIFO method.

Staking rewards and airdrops are treated as ordinary income and taxed at general IRPF rates (19% to 47% depending on your total income).

Wealth tax: Crypto must be declared as an asset on your wealth tax return. The exact rate depends on your autonomous community (Madrid applies a 0% effective rate; other regions range from 0.2% to 3.75%). You declare the value of your holdings as of December 31.

Modelo 721: If you hold crypto worth more than €50,000 on a foreign exchange or platform, you must file Modelo 721 each year between January 1 and March 31. This is a disclosure form — not an additional tax — but failure to file carries a €200 penalty.

See also: The Most Crypto-Friendly Countries in Europe

Portugal

Portugal made headlines for years as a crypto tax haven. That era is mostly over, though long-term holders still benefit from favorable treatment.

Since the 2023 State Budget, Portugal taxes crypto capital gains as follows:

• Held more than 365 days: tax-free
• Held less than 365 days: taxed at a flat 28%

There is an important catch: exchanging one cryptocurrency for another resets your holding period. A BTC-to-ETH swap starts the 365-day clock again on the ETH you receive.

Staking income is classified as Category E (investment income) and taxed at a flat 28%. It does not qualify for the 365-day exemption — you owe tax on staking rewards regardless of how long you’ve held the underlying assets.

Mining and professional trading (Category B income) is taxed as business or professional income, which can reach higher rates depending on your total earnings.

Since 2024, reporting is mandatory for all crypto holders in Portugal, even those who owe zero tax.

Read more: Why Portugal is Europe’s best place for crypto investors and traders

Germany

Germany remains one of the most favorable crypto tax environments in Europe for long-term holders.

The core rule is simple: crypto held for more than 12 months is completely tax-free upon sale, regardless of the profit amount. Sell 50 BTC after 13 months and owe nothing. This was formally reconfirmed by the German Federal Ministry of Finance in March 2025.

For crypto held less than 12 months:

• Gains are taxed as ordinary income at your personal tax rate (14% to 45%, plus a 5.5% solidarity surcharge)
• Gains under €1,000 per year are exempt (increased from €600 starting from the 2024 tax year)

Staking and mining rewards are taxed as ordinary income when received. However, the staking reward tokens themselves benefit from the standard 12-month holding period rule — hold them for a year after receipt and any subsequent gains are tax-free.

DeFi activities: liquidity pool rewards, yield farming income, and lending interest are treated as ordinary income at receipt. The 12-month exemption applies to the resulting tokens if you later sell them.

France

France applies a flat tax (PFU — Prélèvement Forfaitaire Unique) of 31.4% on crypto capital gains. This breaks down as 12.8% income tax plus 18.6% social charges (the social contribution component increased from 17.2% to 18.6%).

France has a distinctive rule that makes it relatively relaxed for active traders: crypto-to-crypto swaps are not taxable events. You only trigger a taxable gain when you convert crypto into fiat currency (euros or any other government-issued currency). Trading BTC for ETH, or swapping tokens for stablecoins, does not create a taxable event under French law.

The DGFiP (French tax authority) only taxes gains when you cash out, and only if your total annual gains exceed €305. Below that threshold, you owe nothing.

Since 2023, the professional vs. occasional trader distinction no longer applies. If you manage your own private crypto portfolio — which describes the vast majority of investors — the 31.4% PFU applies automatically. You can optionally elect for progressive taxation instead, which may benefit lower-income investors.

Mining, staking, and airdrops are treated as ordinary income and taxed at progressive income tax rates.

Italy

Italy’s crypto tax regime has changed significantly and continues to evolve.

For 2025, capital gains on crypto are taxed at 26%. From January 1, 2026, the rate rises to 33% under the 2025 Budget Law. The Italian government originally proposed 42%, but lowered it to 33% following industry pushback.

The previous €2,000 annual exemption threshold has been abolished from 2025 onward — every euro of gain is now taxable.

Italy offered a step-up option for the 2025 tax year: investors could elect to reset their cost basis as of January 1, 2025 by paying an 18% substitutive tax. This was useful for those with large unrealized gains who wanted to lock in a lower effective rate before the 33% kicks in.

Mining income and professional trading are taxed as business income at rates up to 43%.

Netherlands

The Netherlands taxes crypto differently from most European countries. Rather than taxing capital gains when you sell, crypto is taxed under Box 3 (wealth tax) — you pay tax on the presumed return from your total assets, based on their value on January 1 of each tax year.

The Box 3 rate is currently 36%, applied to a deemed return on your net assets rather than your actual gains. Crypto is classified as “other investments” under Box 3 and is subject to the higher deemed return category.

A tax-free allowance applies: singles with net assets below €57,684 (€115,368 for fiscal partners) pay no Box 3 tax in 2025.

The Dutch system is in flux. A 2024 Supreme Court ruling found that Box 3 taxation was disproportionate in cases where the notional return exceeded actual returns. Transitional rules are in place until 2028, when the Netherlands plans to replace the system with a tax on actual returns (including unrealized gains) at a flat 36% rate.

Malta

Malta distinguishes between holding crypto as a store of value and actively trading it.

Crypto held as a long-term investment and not part of a trading business is not subject to capital gains tax. This favorable treatment is grounded in Malta’s Virtual Financial Assets Act, which classifies certain crypto assets explicitly.

If you trade crypto frequently or as part of a business, profits are taxed as business income at the standard corporate rate of 35%. However, through Malta’s full imputation system and available structuring options, the effective rate can be reduced to between 0% and 5% for qualifying structures.

Malta is also implementing DAC8 reporting requirements for crypto service providers from 2026.

Belgium

Belgium has historically been lenient on crypto taxation, but that is changing. New regulations are being implemented in 2025, taking effect from January 1, 2026, which will bring Belgium in line with broader EU reporting standards under DAC8.

Under existing rules, crypto gains by private investors who act as “good family fathers” (a Belgian legal standard for prudent management of personal assets) have generally not been subject to capital gains tax. Speculative trading or professional activity is taxed as ordinary income at rates up to 50%.

The 2026 changes are expected to increase reporting obligations and reduce the ambiguity that has made Belgium relatively favorable for passive crypto holders.

Staking, DeFi, and Airdrops: The Modern Complexity

The original crypto tax frameworks were written with simple buy-and-sell activity in mind. The reality of crypto in 2026 is far more complex — staking, liquidity pools, yield farming, lending protocols, and token airdrops all create income events that don’t fit neatly into traditional categories.

Here’s how most European countries approach these:

• Staking rewards: Generally treated as income when received, taxed at ordinary income rates. Portugal is explicit about this (28% flat). Germany taxes them as income but the resulting tokens benefit from the 12-month holding rule.
• DeFi yield and liquidity pool rewards: Treated as ordinary income in most jurisdictions. Germany specifically addresses these under its 2025 crypto guidance.
• Airdrops: Usually taxed as income at the fair market value when received. In Spain, for example, the conservative position is to declare them as income under the general tax scale. The practical challenge — that most airdrops are of negligible value and extremely difficult to track — is acknowledged, but doesn’t remove the legal obligation.
• NFTs: Treated similarly to other crypto assets in most countries. Selling an NFT for a profit triggers capital gains tax.

Good Practice for Every Crypto Investor

Regardless of which country you’re in, the fundamentals of crypto tax compliance are the same:

• Keep records of every transaction — purchase date, amount, price at time of acquisition, and price at time of disposal
• Download your transaction history from every exchange you use, regularly
• Export wallet transaction logs, especially if you use DeFi protocols
• Record the fair market value of any staking rewards, airdrops, or income received in crypto on the date you received them
• Use a crypto tax tool to automate calculations, especially if you have high transaction volume

For anyone with a meaningful crypto portfolio, using dedicated software is not optional — it’s the only realistic way to stay compliant. Koinly is the tool I’d recommend for European investors.

Countries That Still Offer Favorable Treatment

If you’re seriously considering tax optimization through residency, the most favorable European jurisdictions as of 2026 are:

• Germany — 0% on gains after 12 months
• Portugal — 0% on gains after 365 days (short-term gains at 28%)
• Malta — 0% on long-term investment holdings (not trading businesses)
• Switzerland — private investors generally not subject to capital gains tax; wealth tax applies but at low rates

See the full breakdown: The Most Crypto-Friendly Countries in Europe

This article is for informational purposes only and does not constitute tax or legal advice. Crypto tax rules change frequently and vary by individual circumstance. Always consult a qualified tax professional in your country of residence before making any decisions based on this information.

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