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Austria Crypto Tax Guide 2023

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Since the TAA(Tax Authority Austria) released revised guidelines on crypto taxation effective March 1st, 2022, completely overhauling the crypto tax infrastructure, there has been an air of confusion and uncertainty in the Austrian crypto space. People are confused about whether their investments and holdings fall under the old or new tax regime. And this had led to a lot of friction for crypto enthusiasts across the country.

Therefore, we decided to curate an extensive crypto tax guide for Austrian residents covering crypto taxation before and after the new guidelines came into effect. The idea is to make the new rules clear in the minds of investors so that they don’t have to be intimated by the tax guidelines and can file their taxes appropriately.

Bear in mind that the new guidelines make things a little more complicated for us to explain and although we have tried our best to segment this guide in a way that’s convenient for you to understand, we suggest going through certain sections very carefully to avoid missing out on crucial details.

With that out of the way, let’s get into it.

Crypto Capital Gains

Old Tax Regime

Before the new guidelines came into force on March 1st 2022, Austria didn’t have a dedicated capital gains tax, instead, all the gains were taxed under income tax rules. If you held the assets for less than one year before disposing them of, it was considered a short-term capital gain and attracted income tax liabilities. And if you held the assets for more than a year before disposing of them, you were liable to no taxes.

The rate at which your short-term gains are taxed depends on your income level and the type of transaction you’re involved in. Here are the tax rates based on income level:

You might be thinking how this is relevant for investors in 2023, well the assets that you’ve bought before March 1st 2022, will be taxed according to the old tax rules and any assets that you bought on or before 28th Feb 2022, and are still holding are non-taxable.

Also, note that any interest-bearing transactions like staking, lending, liquidity mining, and yield farming will be subjected to a flat interest-bearing tax rate of 27.5%. 

New Tax Regime

The new tax reform changes a lot of these things. The rates at which your gains will be taxed are different now, and long-term capital gains are no longer tax-free except for legacy holding which we will discuss in a while. The taxation of interest-bearing transactions remains the same even after the tax reform, so that’s one area you don’t have to worry about.

The latest tax reform has changed the game for crypto investors, as all transactions resulting in a short-term capital gain are now subject to the stock tax rate of 27.5%. Also, any assets that you’ve held from before the new tax regime came into effect will be considered legacy holdings and will not be taxed according to the new tax laws.

You can choose to voluntarily opt-in to the new tax laws from January 1 2022, if you wish to.

But wait why would someone want to do that?

Well, because it can save you some money.

Note that in the previous tax regime, your gains were taxed based on your income, so if you happen to be in the higher income group, attracting a 35-40% tax rate, you can opt-in to the new tax regime where you only have to pay a flat tax rate of 27.5%.

One important addition to the tax framework has been the allowance for taxpayers to offset their capital losses against their capital gains, which was previously not allowed.

Capital Gains Tax Rate

We’ve already discussed the tax rate from the previous tax regime in the table above. After the tax reform, all your gains will be subjected to a flat stock tax rate of 27.5%.

Crypto Losses

Old Tax Regime

Before March 2022, taxpayers were not allowed to offset their capital losses and had to do away with them without availing of tax benefits.

New Tax Regime

The new tax regime allows taxpayers to offset their capital losses against their capital gains since crypto is now seen as a tangible asset in Austria. However, you can only balance out your losses with gains by applying the same taxation principles. This implies that if you're eyeing to neutralize your crypto losses, you can only do so by offsetting them against capital gains that fall under the 27.5% tax bracket.

In other words, losses made before March 1 2022 cannot be used to offset gains made after the tax reform. That’s only permissible if you voluntarily opt-in for taxation under the new tax rules.

Lost or Stolen Crypto 

Currently, the BMF hasn't issued any particular instructions on whether losses arising from the theft or misplacement of crypto assets can be treated as allowable capital losses. Nevertheless, the recently introduced crypto tax reform has opened up the possibility of considering such losses as capital losses, provided that you can furnish adequate proof of the theft or loss. It's advisable to seek further guidance from the BMF or a qualified tax advisor for more information on this matter.

How to Calculate Crypto Gains and Losses

Since we now know how our gains will be taxed and how much taxes we will be asked to pay. We should now be concerned with how much gains we’ve made so that we can estimate the amount of taxes we need to pay at the end of the tax year.

But how does one calculate capital gain or loss?

The answer is pretty simple. You just use this formula:

Capital Gain/Loss =  (Disposal Amont or Selling Price) - (Cost Basis)

You just need to know the disposal amount or selling price of the asset and the cost basis to be able to accurately calculate your capital gain or loss. If you’re not aware of what the cost basis is, don’t worry. It’s simply the total of the price you paid to acquire an asset and any additional fees you might’ve settled to acquire the asset like gas fees or transaction fees.

Of course, you need to calculate your cost basis using the accounting method suggested by the tax authorities which happens to be the First-In-First-Out method. We will discuss it in more detail later in the guide.

Crypto Tax Breaks Austria

Most countries offer tax breaks to crypto investors and Austria is no exception. The Austrian tax authorities offer multiple tax breaks under both the old and the new tax regime. Listed below are some of them:

Old Tax Regime

  1. Personal Income Tax Allowance: Under the old income tax laws, you wouldn’t have to pay any taxes on your gains if your total income was less than €11,000.
  1. HODling Crypto: Long-term capital gains were non-taxable under the old tax laws, so if you were HODLing your assets for over 12 months before disposing of them, the gains were considered non-taxable.

New Tax Regime

  1. Speculative Trade Allowance: If you make less than €440 in speculative trades in a tax year, then your gains or profits are considered tax-free.

Crypto Cost Basis Method Austria

The FIFO(First-In First-Out) cost basis method is recommended for cost basis calculations in Austria. This method assumes that the first assets purchased or acquired are also the first assets sold or disposed of.

In crypto investments, FIFO would mean that the first cryptocurrencies purchased are also the first ones sold.

Here's an example of how the FIFO accounting method works:

Suppose you are a crypto investor who purchases the following cryptocurrencies over time:

  • 1 BTC for $10,000 on January 1, 2021
  • 1 ETH for $1,000 on February 1, 2021
  • 2 BTC for $20,000 on March 1, 2021
  • 2 ETH for $2,000 on April 1, 2021
  • 3 BTC for $30,000 on May 1, 2021
  • 3 ETH for $3,000 on June 1, 2021

Now, let's say you decide to sell 2 BTC on July 1, 2021, when the price is $35,000 per BTC. Using the FIFO accounting method, you would sell the 2 BTC that you purchased on January 1, 2021, and March 1, 2021, as they were the first two BTC purchased.

The cost basis of the 2 BTC sold would be calculated by adding the cost of the first and second purchases of BTC, which is $10,000 + $20,000 = $30,000.

The capital gain/loss would be calculated by subtracting the cost basis from the sale price, which is $35,000 - $30,000 = $5,000.

Crypto Income Tax Austria

As mentioned earlier, any gains incurred from crypto-related transactions were considered income by the tax authorities and were taxed under the income tax laws. However, with the new tax guidelines, a new umbrella tax called the stock tax was introduced replacing the income tax. 

We have discussed it in fair detail in the above section titled “Crypto Capital Gains”.

How to Calculate Crypto Income 

For assets bought before March 1, 2022, your net income is simply the sum of capital gains made for all short-term trades, as any disposal made after over a year of holding these assets is not taxable under the old tax guidelines. You can refer to the above section titled “How to calculate crypto gains and losses” if you have any doubts about how to calculate your capital gains.

Tax-Free Crypto Transactions

Listed below are some transactions that are considered tax-free in Austria, regardless of whether you opt-in to the new tax reform or not. 

  1. Buying crypto with fiat
  2. HODLing crypto 
  3. Transferring crypto between wallets
  4. Disposing of crypto assets acquired before February 28, 2022, after having held them for over a year
  5. Gifting crypto

In addition to this, if you opt-in to the new tax reform, you can avail of some additional tax benefits:

  1. Swapping one crypto asset for another
  2. Staking rewards from PoS

Taxed Crypto Transactions

Listed below are some of the taxed crypto transactions in Austria:

  1. Selling crypto
  2. Earning interest income from lending, staking, and yield farming
  3. Mining crypto 
  4. New tokens received from hard forks and airdrops

When to Report Crypto Taxes in Austria

The financial year in Austria runs from January 1 to December 31. Taxpayers must file their returns by April 30 (for paper forms) or June 30 (for online returns) of the following year. For instance, the current financial year is from January 1, 2022, to December 31, 2022, and the deadline for postal returns is April 30, 2023, while for online returns, it's June 30, 2023. It's essential to keep these dates in mind to avoid penalties for late submission.

Note that if you file your tax return through a registered tax professional, the deadline for you extends to 31st March 2022.

How to Report Crypto Taxes in Austria

When it comes to filing taxes in Austria, cryptocurrency investments are considered part of the taxpayer's annual return. The reporting of such investments must be done electronically using the FinanzOnline portal before the 30th of June. Specifically, individuals should report their cryptocurrency investments under the category of "other income" on their Income Tax Return - E1.

How to File Crypto Taxes in Austria

Here’s a step-wise tutorial on how to file your crypto taxes using the online Finanz portal:

  1. Create a FinanzOnline account - If you don't already have one, you must register with the Austrian tax authorities by creating a FinanzOnline account. You can do this by visiting the FinanzOnline website and following the registration process.
  1. Gather all necessary information - Before starting the tax filing process, you should gather all the relevant information and documents you will need to complete the process. This includes your income information, deductions, and any crypto investments you made during the tax year.
  1. Log in to your FinanzOnline account - Once you have all the necessary information, log in to your FinanzOnline account using your username and password.
  1. Select the tax return form - From the menu, select the tax return form that applies to you. For example, if you are an individual, select the "Income Tax Return - E1" form.
  2. Fill out the tax return form - You will be directed to the tax return form, which you need to fill out with your income and expense details. Ensure that you accurately report all your crypto investments under the category of "other income."
  1. Submit the tax return - After filling out the form, you need to submit it electronically by clicking the "Submit" button. Once submitted, you will receive a confirmation message that your tax return has been successfully filed.
  1. Pay any outstanding tax - If you owe any tax, you will be required to make the payment electronically via the FinanzOnline portal. You can do this using various payment options provided by the portal.
  1. Track the status of your return - You can check the status of your tax return by logging into your FinanzOnline account and selecting the "Tax Return Status" option from the menu.

Note that you need to complete all your income calculations and review them thoroughly before you file your taxes so that you can validate the tax calculations made by the software. One way to avoid making mistakes in your calculations is by using crypto tax software like Kryptoskatt to do these calculations. The platform can auto-fetch all your transactions and calculate the cost basis for each one of them, generating legally compliant tax reports in a matter of minutes. 

How to Avoid Tax on Cryptocurrency in Austria 

There is no legal way to avoid crypto taxes altogether in Austria and you might end up in a lot of trouble with the tax authorities if you choose to do so. However, there are ways you can reduce your tax bill and pay lesser taxes. We’ve already discussed most of them in detail in prior sections of the guide under the section titled “Crypto Tax Breaks Austria”. Here’s a summary:

  • HODL assets bought on or before Feb 28 2022, as long-term capital gains were not considered taxable under the old tax laws
  • Swap one crypto asset for another. It’s considered non-taxable after the tax reform.
  • Opt-in for taxation under the new tax rules as it might significantly reduce the rate at which your gains will be taxed, especially if you fall in the higher tax bracket.
  • Make a donation because gifts to registered charities are tax-deductible.

Tax On Mining Crypto in Austria

The taxation on mined tokens varies based on the time you mine these tokens. If you mine these tokens on or before February 28 2022, they will be subjected to income tax rules. And if you’ve mined these tokens on or after March 1 2022, they will be taxed at receipt at a flat rate of 27.5%.

These tokens will also be taxed upon disposal, so if you choose to dispose of your assets before March 1, 2022, an income tax will be levied on the transactions and the tax rate will vary based on your income group. And if you dispose of your asset after the 1st of March a flat rate of 27.5%.

Starting from March 1st, 2022, trading of mined coins will be exempt from tax. Moreover, if you mined coins before February 28th, 2021, and held them for more than a year, these holdings will be classified as legacy assets. Consequently, you will not be liable to pay tax on any profits arising from selling, trading, or using these coins.

Crypto Margin Trades, Future, and CFDs

The BMF lacks a definitive framework for determining the tax implications of trading activities involving crypto margin trading, futures, and other CFDs. Nonetheless, it's worth noting that the 27.5% tax rate that applies to capital gains from financial assets, including derivatives, generally also pertains to crypto. It's recommended that you consult with a tax expert for specialized guidance regarding the taxation of crypto derivatives and other CFDs.

NFT Taxes Austria

In Austria, the taxation of NFTs largely depends on their intended use and the specific circumstances of their acquisition and sale.

If an individual buys an NFT as an investment and later sells it for a profit, any capital gains realized from the sale will be taxed based on the date of acquisition of disposal. If acquired and disposed of on or after March 1 2022, the gains will be subjected to a flat rate of 27.5% in the new tax regime, and if disposed before that, the gains will be subjected to the regular income tax rates. 

On the other hand, if an NFT is acquired and sold as part of a business activity, the transaction may be subject to Value Added Tax (VAT) at a rate of 20%. This would be the case, for example, if a company creates and sells NFTs as part of its regular business operations.

De-Fi Crypto Taxes Austria

The BMF is yet to release clear guidelines on the taxation of De-Fi transactions. However, this does not imply in any way that De-Fi transactions are tax-free. It just means that you need to interpret the current guidelines and apply them to your De-Fi transactions to calculate your NFT taxes.

Lucky for you we deliberated this matter with tax professionals and here’s how specific De-Fi transactions will be taxed:

  • Interest income from De-Fi Protocols: A flat 27.5% tax on receipt of tokens and upon disposal
  • Borrowing Crypto assets from De-Fi Protocols: Tax-Free
  • Paying interest back to De-Fi Protocols:  The transaction is considered tax-free until you’re making interest payments using fiat currency.
  • Staking and Liquidity Mining on De-Fi Protocols: A flat 27.5% tax on the tokens upon receipt.
  • Yield Farming: A flat 27.5% tax rate on tokens upon receipt and disposal.
  • Adding/Removing Liquidity: Tax-Free
  • Income from Engage/Play to Earn De-Fi Protocols: A flat 27.5% tax rate on tokens upon receipt and disposal.
  • Income from Margin Trades and Futures on De-Fi Protocols: A flat 27.5% tax on any realized gains.

Can the BMF Track Crypto?

The answer is yes.

Austria's crypto tax reform emphasizes that investors must report their crypto transactions to the BMF and pay their fair share of taxes. The BMF will collaborate with major crypto exchanges to obtain KYC data, similar to other European tax offices. Additionally, the upcoming EU directive, Dac8, may allow the BMF to verify crypto ownership and investigate crypto companies' accounts.

What Crypto Records will the BMF Want?

The BMF hasn’t released an official list of documents that taxpayers need to maintain, but as a general rule you should maintain the following documents to avoid complications while filing your taxes:

  • The date of the transaction
  • Which cryptocurrency was part of the transaction
  • Type of transaction
  • How much was bought, sold, or exchanged
  • The value of the cryptocurrency in euro at the time of the transaction
  • Exchange records and other relevant statements
  • Wallet addresses

How are Airdrops and Forks Taxed in Austria

Soft forks are non considered a taxable event by the BMF as no new tokens are created in the process. 

Airdropped and hard-forked tokens are treated similarly for tax purposes. They are not taxed upon receipt and have a cost basis of €0, which is not good news. This means that when you sell your tokens, you will be taxed on their full value, not just the gains. If you sell these tokens on or before February 28, 2022, regular income tax rules will apply, but if you sell them after that date, a flat tax rate of 27.5% will be charged on the sale.

Frequently Asked Questions(FAQs)

  1. Is Crypto legal in Austria?

Yes, crypto is legal in Austria. Austria has a clear regulatory framework for cryptocurrencies and has recognized them as a means of payment since 2019. The country has implemented anti-money laundering (AML) regulations that apply to cryptocurrency exchanges and service providers, and the Financial Market Authority (FMA) is the responsible regulatory body for overseeing compliance with these regulations. Overall, Austria has been proactive in embracing blockchain technology and cryptocurrencies, with several initiatives aimed at promoting innovation in this field.

  1. How is Crypto taxed in Austria?

In Austria, cryptocurrencies are treated as assets and are subject to capital gains tax. This means that any profit made from buying and selling cryptocurrencies is subject to taxation, just like any other investment.

When calculating capital gains tax, the cost basis of the cryptocurrency is determined based on the value at the time of acquisition. If the cryptocurrency is held for more than one year, the tax rate on the capital gains is 27.5%. If the cryptocurrency is held for less than one year, the gains are taxed as income, with a progressive income tax rate that ranges from 0% to 55%.

It's also worth noting that any income received in the form of cryptocurrency, such as through mining or airdrops, is subject to income tax. Additionally, if a business accepts cryptocurrency as payment, the transaction is subject to value-added tax (VAT) in the same way as any other transaction.

  1. Is any crypto tax-free in Austria?

In Austria, there is no tax-free cryptocurrency. All gains from buying and selling cryptocurrencies are subject to taxation, just like any other investment. Even if you receive cryptocurrencies as a gift or through an airdrop, they are still subject to taxation as income.

  1. How to file crypto taxes using Kryptoskatt?

We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a step-wise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. Although there’s an easy way to file your crypto taxes using a crypto tax software called Kryptoskatt.

Where all you need to do is log in on the platform, add all your trading accounts, wallets, and De-Fi accounts and sip coffee while Kryptoskatt does all the heavy lifting for you. The platform can auto-fetch all your transaction from the tax year and generate a legally compliant tax report within a matter of minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.