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.
Tracking every trade, swap, staking reward, and airdrop manually is a nightmare. Koinly connects to your exchanges and wallets, calculates your gains automatically, and generates country-specific tax reports.
The Big Picture: How Europe Classifies Crypto
Most European tax authorities treat cryptocurrency as an asset rather than as currency. That means 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 and Portugal are notable exceptions here: crypto-to-crypto swaps aren’t taxed at the time of the swap, and the tax falls when you later dispose of the coins for fiat or goods. Many other European countries treat swaps 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 from 2026 onward is being collected and will be 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.
Providers started collecting this data on January 1, 2026. The first reports, covering 2026, are due between January and September 2027 depending on the country, and member states must exchange them with each other by September 30, 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 are classed by the tax authority’s binding ruling V1766-22 as capital income from lending your own capital to third parties (rendimientos del capital mobiliario under article 25.2 of the IRPF law), paid in kind. That income goes into the savings base, so it’s taxed at the same 19% to 30% rates, valued at its euro market price on the day you receive it. Airdrops are less settled; the conservative approach is to declare them in the general base, taxed at your regular IRPF rates.
Wealth tax: Crypto must be declared as an asset on your wealth tax return. The exact rate depends on your autonomous community. Madrid’s 100% relief brings most residents’ bill to zero, but while the temporary large-fortunes solidarity tax is in force, the wealthiest Madrid residents pay wealth tax instead of it. Other regions apply their own scales and reliefs. You declare the value of your holdings as of December 31.
Modelo 721: If your crypto held on foreign exchanges or platforms is worth more than €50,000 in total at year end, you must file Modelo 721 between January 1 and March 31 of the following year. After the first filing, you only file again if that balance has risen by more than €20,000 since your last declaration, or if you’ve stopped holding crypto you previously declared. This is a disclosure form, not an additional tax, but failing to file can lead to penalties.
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 365 days or more: tax-free
- Held less than 365 days: taxed at a flat 28%
Exchanging one cryptocurrency for another isn’t taxed at the time of the swap. The coins you receive take on the acquisition cost of the ones you gave up, and tax applies when you later sell for fiat or goods. This deferral only covers swaps with counterparties in the EU, the EEA, or a country that exchanges tax information with Portugal.
Staking income is classified as Category E (investment income) and taxed at a flat 28%. When the rewards are paid in crypto, though, there’s no tax on receipt: the coins are taxed as a capital gain (Category G) when you later sell them for fiat or goods.
Mining and professional trading (Category B income) is taxed as business or professional income, which can reach higher rates depending on your total earnings.
Gains that are exempt because you held the crypto for 365 days or more still have to be declared, in Annex G1 of your IRS return.
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 on the income tax itself once your tax bill passes the exemption threshold)
- 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: lending interest is taxed as other income at receipt, and the 12-month exemption applies to the resulting tokens if you later sell them. Staking and lending income is tax-free if your total income of this kind stays under €256 a year. The 2025 guidance doesn’t specifically address liquidity pools and yield farming, so those need case-by-case treatment.
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) or use it to pay for goods or services. 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 these disposals if the total amount you receive from them in a year exceeds €305. Below that threshold, you owe nothing.
If you manage your own private crypto portfolio, which describes the vast majority of investors, the 31.4% PFU applies however many trades you make. Activity that resembles a professional’s, with frequent and sophisticated trading, is taxed instead as non-commercial income (BNC) at progressive rates. Private investors can optionally elect for progressive taxation instead of the PFU, which may benefit lower-income investors.
Mining and staking profits are taxed as non-commercial income (BNC) 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, though euro-denominated e-money tokens stay at 26% under the 2026 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, so 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 (6.00% for crypto in 2026) rather than your actual gains. If your actual return was lower, you can report that instead, and the Belastingdienst uses whichever figure is more favorable to you. 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. A bill to replace the system from 2028 with a tax on actual returns (including unrealized gains) at 36% passed the lower house in February 2026, but it hasn’t been enacted and its timing is under review.
Malta
Malta distinguishes between holding crypto as a store of value and actively trading it.
Coins such as Bitcoin held as a long-term investment and not as part of a trading business are not subject to capital gains tax, because coins aren’t on the Income Tax Act’s list of capital assets that attract the tax. The tax authority’s DLT income tax guidelines set this out, and financial tokens can still fall under the capital gains rules.
If you trade crypto frequently or as part of a business, profits are taxed as trading income, at progressive personal rates of up to 35% or at the 35% corporate rate if you trade through a company. Through Malta’s full imputation and tax refund system, shareholders of a qualifying trading company can bring the effective rate down to around 5%.
Malta is also implementing DAC8 reporting requirements for crypto service providers from 2026.
Belgium
Belgium has historically been lenient on crypto taxation, but that changed in 2026. A law of April 6, 2026 introduced a 10% tax on capital gains on financial assets, crypto included, for gains from January 1, 2026, with an annual exemption of €10,000. Gains built up before 2026 aren’t taxed.
Before 2026, crypto gains by private investors who act as “good family fathers” (a Belgian legal standard for prudent management of personal assets) generally weren’t subject to capital gains tax. Speculative trading or professional activity was taxed as income at rates up to 50%.
DAC8 reporting, which also started in 2026, gives the Belgian tax authority the platform data to apply the new tax.
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: Treated as income in many countries, though the timing differs. Germany taxes them as income on receipt, and the resulting tokens then benefit from the 12-month holding rule. Portugal taxes staking income at 28% but defers tax on rewards paid in crypto until you sell them.
- DeFi yield and liquidity pool rewards: Treatment varies by country and by how the protocol works. Germany’s 2025 crypto guidance covers lending income but doesn’t specifically address liquidity pools.
- Airdrops: Often 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 (most airdrops are of negligible value and extremely difficult to track) is acknowledged, but doesn’t remove the legal obligation.
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.
Using Losses to Offset Gains
In many European systems, realized crypto losses can be set against realized gains from the same year, and some countries let you carry unused losses forward, with rules that vary by country and income type. Selling a position that’s under water before December 31 can therefore cut the tax on gains you’ve already taken. This is tax-loss harvesting. An unrealized loss counts for nothing, so the sale has to happen within the tax year. Before buying the same coin straight back, check whether your country has an anti-avoidance rule that disallows a loss when you repurchase within a set period, and remember that trading fees and spreads eat into the saving.
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.
Related reading: can governments ban Bitcoin? and my guide to investing in Bitcoin and crypto.
Related
hi, nice article. What about stablecoins? they are cryptos but they are definitely a cash equivalent
Hello Jean.
Thank so much for this excellent post.
We are looking for some accountants in Malta or Portugal that are experts in crypto because we need to create a document showing that most of the income our company generates is from staking some cryptocurrencies. Do you know a good professional to recommend?
Thank you
Yes, email me and I’ll put you in touch.
Hi,
I noticed that your list of Countries with no Crypto Taxes doesn’t include Cyprus.
However, the information I have is that “The Cyprus Tax on profits from trading in shares or other securities, including forex or bitcoins is 0%”.
Do you have different information?
Thanks
That appears to be the case Zoltan, however, I have not done much research on Cyprus. I would personally opt for Malta ahead of Cyprus as the financial sector there is more solid and has a good track record.
Hi Jean,
Thanks for the article, very insightful. I was reading in hopes of finally understanding whether profits made through crypto investments are taxable events in Malta or not. I found that all sites end up quoting the same sources but never really give a plain answer as to whether this is infact a taxable event.
You mention that;
“the tax treatment of transactions involving coins like Bitcoin would be identical to the tax treatment of transactions involving fiat or conventional currency. As such, coins fall outside the scope of income tax and duty, and gains on isolated transfers will not be taxed in Malta.
Conversely, where the Coins are transferred as part of a coin exchange business or trade, profits realised from such business would be taxed at the standard Maltese corporate income tax rate of 35%.”
I didn’t understand what you meant with the last part. What constitutes a coin exchange trade? Lets say i bought BTC using EUR, and eventually traded BTC back to EUR for a significant profit. Doesn’t that count as a transaction involving crypto, thus falling outside the scope of income tax? At the same time it also seems to be a coin exchange trade, so then the second paragraph implies that it is a taxable event.
Thanks again for writing this article, it was very informative!
Kind regards,
Ben
Hi Ben, you’re welcome. What I meant by that sentence is that if you operate a crypto exchange your profits are taxed at 35%. It is not applicable in your case since you are just occasionally trading. Long-term holding and occasional trades in Malta are usually classified as non-taxable. However, always consult a tax lawyer as this is not explicitly stated anywhere but rather is an interpretation of the current laws.
Following your reply that refers to “occasional” trading and long term holding not being taxed in Malta – let’s say I want to invest a percentage of my income into cryptomarket on a monthly basis (hence, the date of my purchase of cryptocurrency is constantly “moving” in time) to then sell a part of my investment for a profit whenever the time is suitable to do so, in order to re-invest my gains back into crypto. Would this be considered a long term investment if I hold the coins or token for less than a year, but have not traded as such for multiple months? I can’t find any clear indication as to what exactly is considered a long term investment and trading activity in Malta. I see Malta being listed over and over among the countries that do not tax crypto gains, yet, it is not at all straightforward to me how I should approach the eventual taxes on gains. I would be very grateful for any hints where to look for more precise information / legislation on the subject.
Hi Jean,
Thank you for this great information.
I have a question regarding the Portuguese legislation. What would be the criteria to consider crypto investing/trading a professional activity and thus taxable under category B? If I just go investing in some different projects and only trade from BTC to mayor ALTs to smaller ones from time to time just to follow the cycles and farm more coins to be able to make enough money from staking and lending, would I be subjected to any taxation?
Although I follow the markets daily, you woulnt see daily activity, only the periods I’m DCAing into something…
Good question, make sure you check out my dedicated post about Portugal as well.
Here we get to know about bitcoin cryptocurrencies tax information in detail. It helps us to decide that which one is best among its types. I enjoyed reading this article and would suggest others it as well. Thank you for this article! This is really very informative for us.
The forthcoming Bitcoin halving will definitely impact Bitcoin mining and price in a big way. I will warn investors not to invest with small companies because It will cause a massive shake in the mining industry which will sieve out the smaller operators to make more room for larger mining operators who have access to cheaper energy supply. PLEASE store your coins in a hardware wallet because bitcoin is about to rocket up to 100,000 anytime after the halving event. You can note today’s date down and mark my words!!! I know this because the last halving that happened in 2016 caused a massive bull run to 20k afterwards in 2017.
You were right.
Hi Jean,
I have been living and working in Malta for more than a year, I have my residence here and I started investing in crypto last October 2017.
De hecho soy espanol. Sabrías como funciona el tema de impuestos aquí, he intentado buscar información y la única que he encontrado (en Reddit) dice que están exentos pero lo dudo mucho o me gustaría saber en función de que.
Muchas gracias de antemano. Much appreciated.
Regards,
David
Hi David,
They are exempt if you trade them after holding them for a long-term period (usually considered to be one year). If not, they are taxable like other income. I can’t tell you exactly how to fill in the tax form in Malta as I don’t live there anymore, but if you contact me via email I can put you in touch with an accountant who would be able to advise you.
BCH is a new Cryptocoin:)
Yes it is, although it’s quite a useless one.