Crypto tax in Austria: 27.5 percent, and the clock does not matter

Selling crypto for euros realizes a capital gain, taxed at 27.5 percent. Paying for goods or services with crypto counts the same way, because a disposal is a disposal whatever arrives in return. Buying crypto with euros is not an event, and neither is holding it.

The surprise is the swap. Exchanging one crypto asset for another does not realize a capital gain in Austria; the taxation is deferred, and the asset received inherits the acquisition cost of the asset given up. The CMS guide to Austrian crypto taxation states the rule and its consequence. For an active trader this is a material difference from Germany, where every swap is a disposal with a gain to compute. In Austria the gain accumulates inside the position and surfaces when the chain of swaps ends in euros or in a purchase.

What this does not remove is the record keeping. A deferred gain still has to be calculable years later, which means the cost basis has to travel through every swap in the chain. A trader who did not record the swaps cannot compute the gain when the euro exit finally happens.

Austria separates these more finely than most jurisdictions, and getting the categories wrong costs money in both directions.

Mining produces current income from crypto assets, taxed at 27.5 percent. Lending does too, and so does supplying a liquidity pool, which the rules treat the same way as lending. Classical staking, by contrast, does not produce taxable current income on receipt. Airdrops and hard forks do not either. In each of those untaxed cases the asset received takes an acquisition cost of zero for tax purposes, so the tax arrives later: the whole proceeds are gain when the asset is eventually sold.

That zero cost basis is the part people miss. An untaxed receipt is not a tax-free receipt, it is a deferral with the entire value in the taxable base at disposal. The distinction between classical staking and lending therefore decides when the tax falls and not whether it falls, and for a position held a long time that timing is worth having.

Crypto acquired before 1 March 2021 is Altbestand and stays under the law that applied when it was bought. Under those rules a holding was a speculative transaction: a disposal within one year of purchase was taxed at the progressive income tax rate, and a disposal after the year was free of tax. Since any such holding is now well past a year, an Altbestand position can be sold without Austrian income tax on the gain.

Two things follow. An Austrian investor's position depends on a purchase date from several years ago, so the acquisition records decide the outcome, not the current statement. And the two pools behave differently in the same wallet: coins bought in 2020 and coins bought in 2022 are taxed under different regimes, which is why a provider's automatic calculation needs the acquisition dates to be right before it can be trusted.

From 1 January 2024 certain Austrian crypto-asset service providers have to calculate, withhold and pay the tax, which turns the obligation from a filing exercise into a line on a statement. Where a withholding agent exists, the investor's tax on that income is settled at source.

Where no Austrian agent is involved, the income has to be declared to the tax authorities after the end of the tax year. That is the position for anyone using a provider outside Austria, which is most foreign exchanges, so the withholding rule simplifies life for the investor who uses an Austrian provider and changes nothing for the one who does not. Reporting under the EU rules for crypto-asset service providers is making the second group more visible to the authority than it used to be.

A crypto loss can be offset against crypto gains and against capital gains more generally, which includes gains on shares. It cannot be offset against other categories of income, so a loss does not reduce a salary.

The restriction that bites is the timing: losses can only be offset in the year they are realized and cannot be carried forward. A bad year followed by a good one therefore produces tax on the good year's gains with no relief for the bad year's losses. For an investor sitting on an unrealized loss in December, that turns the realization decision into a calendar question, which is the opposite of how a long-term holder would prefer to think.

An NFT is not a crypto asset for these purposes. It is treated as a movable asset, which puts it back under the speculative transaction rules: a sale within one year of acquisition is taxed at the progressive income tax rate, and a sale after a year is free of tax.

The practical effect is that an NFT and a token held in the same wallet follow different regimes, and the progressive rate can exceed 27.5 percent for an investor with substantial other income. It also means an NFT held for over a year is in the better position of the two, which is the reverse of the picture for fungible tokens acquired after the cut-off.

The two systems reach opposite answers on nearly every point, which is why an investor moving between them cannot carry assumptions across. Germany taxes a private crypto gain at the personal income tax rate and exempts it entirely after a holding period, so a German long-term holder can pay nothing. Austria taxes at a flat 27.5 percent with no holding period, so an Austrian long-term holder always pays, and at a rate that is favorable for someone with high other income.

On swaps the positions reverse. Germany treats a crypto-to-crypto exchange as a disposal with a taxable gain; Austria defers it. An active trader is therefore better off in Austria and a patient holder in Germany, and that follows from the rules, not from anybody's intention. Finance Loop keeps the German treatment at crypto tax in Germany, and the Austrian rules come up in the Bitcoin seminar for Austria because they are what participants want settled.

27.5 percent on a gain from crypto acquired on or after 1 March 2021, regardless of how long it was held. The same rate applies to current income from mining, lending and liquidity pools. Crypto acquired before 1 March 2021 is Altbestand under the older speculative-transaction rules, where a disposal after one year carries no income tax. NFTs are outside the crypto rules and follow the progressive rate if sold within a year.

No. Exchanging one crypto asset for another does not realize a capital gain in Austria, and the taxation is deferred: the asset received takes over the acquisition cost of the asset given up. The gain becomes taxable when the position is eventually sold for euros or spent on goods or services. This is the clearest difference from Germany, where every swap is a disposal.

Classical staking does not produce taxable current income when the reward arrives. The reward instead takes an acquisition cost of zero, so the full amount is taxable gain when it is sold. Lending and supplying a liquidity pool are treated differently: both produce current income taxed at 27.5 percent on receipt. The line between classical staking and a lending-like arrangement therefore decides when the tax falls, and it is worth establishing before the position is opened.

No. A loss can be offset against crypto gains and other capital gains in the year it is realized, and nothing is carried into later years. It also cannot be offset against other categories of income such as employment income. An investor holding a loss position at year end faces a timing decision as a result, because realizing in a year with gains to offset is worth more than realizing in a year without them.

Where an Austrian provider acts as withholding agent, the tax on that income is settled at source and the income does not need to be declared separately. Where the provider is outside Austria, which covers most international exchanges, the income has to be declared after the end of the tax year. A portfolio split across an Austrian and a foreign provider therefore produces both situations at once, and the foreign part is the part that needs the filing.