Austria Crypto Tax Guide 2023

Crypto usage in Austria is yet to go mainstream, with the country ranking 104th in the world in terms of adoption for 2022. However, the use and ownership of crypto assets are subject to taxation under the country's tax laws which are clearly set out by The Austrian Bundesministerium für Finanzen (BMF). This means that individuals who buy, sell, or hold crypto assets may be required to declare their crypto-related activities on their tax returns and pay taxes on any profits or income earned from their crypto transactions. Understanding the tax rules and regulations for crypto in Austria is important for individuals and businesses to avoid penalties and ensure compliance with the law.

Is crypto taxed in Austria?

Yes, crypto assets are subject to taxation in Austria in certain circumstances. The BMF released a crypto tax reform on 1st March, 2022 which has changed the way cryptocurrencies are taxed in the country.

How is crypto taxed in Austria?

In Austria, the use and ownership of crypto assets are subject to taxation under the country's tax laws. Individuals who buy, sell, or hold crypto assets may be required to declare their crypto-related activities on their tax returns and pay taxes on any profits or income earned from their crypto transactions.

Before the recent tax reform, cryptocurrencies held for one year or longer before being sold were considered long-term gains and were tax-free. Cryptocurrencies held for less than a year were considered short-term gains and were taxed at progressive tax rates similar to ordinary income.

Under the new tax reform, cryptocurrencies are taxed as income from capital assets at a fixed rate of 27.5%. This means that the date when the crypto assets were acquired will determine how they are taxed, even if they are sold after the tax reform took effect.

The Austrian Ministry of Finance (BMF) does not view cryptocurrencies as legal tender, currency, or money like the euro or US dollar. Instead, they are considered a digital representation of value that is not controlled by a central bank but used by individuals for exchanging or transferring value.

It is important to be clear that the BMF does not consider all cryptocurrencies to be included in this definition. BMF specifically states that non-fungible tokens (NFTs) and tokens under-pinned by real assets will fall under general tax regulations depending on the exact nature of the token in question. If you have traded either of these token types, it is highly recommended to speak to a tax professional in Austria to get advice about your specific situation.

Long and Short Term Gains

Before March 2022, realized gains from crypto assets in Austria were classified as either long-term or short-term, where long-term gains were completely tax-free. To qualify as a long-term gain, the asset must have been held for a minimum of 12 months before being sold. Assets held for less than 12 months before being sold are considered short-term gains.

Crypto Tax Reform Austria, 1st March 2022

The new tax reform in Austria, which took effect on 1 March 2022, changes the way that crypto assets are taxed in the country. Under the new rules, the BMF no longer distinguishes between long-term and short-term gains from crypto assets. Instead, all realized gains from crypto assets are taxed as income from capital assets at a fixed rate of 27.5%, similar to other income from capital assets such as stocks and bonds.

However, these changes only apply to crypto assets acquired after 28 February 2021. Assets acquired before this date are considered "old assets" and will not be subject to the new tax rules when they are sold in the future. Taxpayers who have realized crypto profits between 1 January 2021 and 1 March 2022 can choose whether to apply the old or new tax rules to their disposals.

The BMF also states that exchanging one crypto asset for another is not considered a taxable disposal. This means that Austrian crypto investors will not pay taxes on their crypto holdings until they convert their assets to fiat currency, such as the euro. Crypto Tax Calculator automatically enables the Tax Setting, “Treat crypto to crypto trades as non-taxable disposals”, when you set your jurisdiction to Austria.

Is crypto mining taxed in Austria?

The BMF considers cryptocurrency received as mining rewards to be income and therefore subject to taxation. Under the old tax rules, mining rewards were taxed as other income according to progressive tax rates. Under the new tax rules, which took effect on 1 March 2022, mining rewards are taxed as income from capital assets at a fixed rate of 27.5%.

Any costs directly associated with the mining of cryptocurrency, such as electricity or hardware, can only be deducted if the taxpayer chooses the standard taxation option – Regelbesteuerungsoption.

Is crypto staking taxed in Austria?

Under the new tax reform, the BMF states that only income deemed to be generated is taxable. The BMF specifically states that:

“… current income is not deemed to have been generated if:

the service associated with processing the transaction consists primarily of investing (staking) existing cryptocurrency…” Source: Tax Treatment of Cryptocurrencies

However, since the crypto received as staking rewards will have a cost basis of zero, the full amount will become taxable if the crypto is every sold to fiat currency, such as Euros.

Other non-taxable crypto transactions in Austria

Correct record keeping is essential to ensure that non-taxable transactions are not tagged incorrectly. The following are transactions that do not immediately have any tax implications in Austria:

• buying cryptocurrencies with fiat
• trading one cryptocurrency for another (after 1st March, 2022 - in most cases)
• receiving an airdrop or bounty
• coins received from a hardfork
• gifting/receiving a gift (below given thresholds)

Tax reporting deadlines in Austria

In Austria, the tax year runs from 1 January to 31 December. Crypto taxes should be reported in your annual tax return, along with ordinary income from employment and other sources.

For the 2022 tax year, the filing deadline is 30 April 2023 if you are submitting your tax return using paper forms. If you are filing online, the deadline is two months later on 30 June 2023. It is important to file your tax return on time to avoid penalties and ensure compliance with the law.

Does the BMF know about my crypto holdings?

Despite popular belief, cryptocurrency is extremely easy to track and is not as anonymous as many believe. Due to much stricter regulation around cryptocurrency exchanges and digital asset investment, almost all exchanges require users to complete a ‘Know-Your-Customer’ (KYC) identification application before the account can be used to purchase crypto. If you have signed up to any exchange which required this check, it is highly likely that the BMF has your user record from that exchange. Withdrawals to external wallets are also tracked, and it is a simple process to follow the money trail from an exchange account to external wallets due to the availability of data on public blockchains.

The European Union’s sixth Anti-Money Laundering Directive means that any company that provides financial services to customers or other businesses must adhere to stricter regulations regarding customer identification. This directive also means that data is made available between EU member states, so signing up for an exchange in another EU country does not mean that the BMF will be unable to gain access to your data.

The European Commission’s proposed Directive on Administration cooperation (DAC8) is a step towards stricter regulation regarding cryptocurrency ownership and trading. The proposed update will likely take effect in the next 12 months, increasing data availability on cryptocurrency owners to financial authorities across EU member states to address tax evasion or fraud. Once this takes effect, DAC8 may allow the BMF to specifically search if a person owns cryptocurrency, as well as other information such as holdings, transaction history and withdrawal addresses.

How to report crypto taxes in Austria

To report crypto taxes in Austria, individuals must include the following information on their tax return:

• A detailed record of all crypto transactions, including the date, amount, and value of each transaction in Euros.
• The total value of all crypto assets held at the end of the tax year.
• The total amount of profit or loss from crypto transactions during the tax year.
• Any income received from the sale of goods or services using crypto assets.
• Any expenses related to crypto transactions, such as fees paid to exchanges or wallet providers.

Individuals must also provide proof of their crypto transactions, such as receipts or bank statements, to support their tax declarations. Crypto Tax Calculator can help in maintaining these records for tax purposes. Most Austrians use Finanzonline to report their taxes. It is recommended to consult a tax advisor or accountant for assistance with declaring crypto taxes in Austria if you are unsure of your obligations.

How Crypto Tax Calculator Can Help

Manually maintaining records of all of the above doesn’t sound like much fun, does it? Spoiler: it’s not. That’s where we come in! Our crypto tax calculator software can help you aggregate your crypto transaction data to help calculate any gains, losses, income and/or expenses. As an added bonus, we’ve worked with tax professionals from Austria to ensure our platform follows your region’s guidelines.

Once you’ve imported all your data to form a complete overview of your trading history, you’ll be prompted to reconcile any outstanding lines. After those are reconciled, you’ll have the option to download reports showing these values clearly. These reports and the information included will give you the amounts needed to complete your yearly tax return for BMF.