BMF letter on the income tax treatment of virtual currencies and of tokens from June 17, 2021 - part 1

After a long wait for a statement from the German Federal Ministry of Finance on the income tax treatment of virtual currencies the time had finally come on June 17, 2021. The first draft of a BMF letter (hereinafter “BMF draft”) was forwarded to the associations and stakeholders and is expected to result in a decree by the end of the year. Reading the BMF Draft is a challenge for many a reader, at least for all those familiar with the virtual world, who are astonished to learn that their actions could trigger tax consequences, and for some tax professionals who have to familiarize themselves with virtual issues in order to understand what is actually to be regulated for tax purposes.