Declaring Crypto Gains Late in Germany: When a Voluntary Disclosure Under Section 371 Still Prevents Prosecution

If you failed to declare gains from Bitcoin or other crypto assets in earlier German tax returns, you face a question with a clear answer: a voluntary disclosure that exempts you from prosecution under section 371 of the German Fiscal Code only works for as long as the offence has not been discovered and none of the statutory blocking grounds applies. That window is currently getting shorter. The German Crypto Asset Tax Transparency Act has applied since January 1, 2026, and in the 2027 calendar year crypto service providers will transmit data for the 2026 reporting period to the Federal Central Tax Office for the first time.

This article explains how a subsequent declaration works in practice, which years are still open at all, what causes a voluntary disclosure to fail and what it costs. It does not replace advice: a voluntary disclosure is a document with criminal law consequences and belongs in the hands of a tax adviser or a lawyer specialising in tax law. Draft it yourself and forget a single year or a single exchange, and you lose the exemption from prosecution for everything.

Why Your Crypto Data Will Sit With the Federal Central Tax Office From 2027

The Crypto Asset Tax Transparency Act, KStTG for short, was adopted on December 22, 2025 and transposes the EU directive DAC 8 into German law. DAC 8 is the eighth version of the EU administrative cooperation directive; it extends the automatic exchange of information between tax authorities to crypto assets. The reporting obligation falls on the service providers themselves: exchanges, brokers, custodians and intermediaries that exchange or transfer crypto assets for customers. Investors themselves report nothing to the authorities.

According to the Federal Central Tax Office, what gets reported is the aggregated transaction data of the wallets, together with name, address, tax residence, tax identification number, date of birth and transaction volumes. Providers deliver to the Federal Central Tax Office by July 31 of the following calendar year in each case, and the office passes the data on to the EU central register and to the partner states of the international framework by September 30. The first of these transmissions covers the year 2026 and takes place in 2027.

For everyday purposes that means two things. First, providers are already asking for tax residence and tax identification numbers; anyone who does not respond must expect restrictions on their account. Second, from 2027 the tax office will hold a body of data that can be matched against the return you filed. A data match is not criminal proceedings, but it is the route by which discrepancies come to light.

What the 2026 Reporting Year Does Not Do

The report covers the period from 2026 onwards. It brings no retroactive analysis of the years 2017 to 2025. That is the most common misconception in this field, and it leads to wrong conclusions in both directions. Anyone who believes old years are thereby automatically exposed panics needlessly. Anyone who believes old years are therefore safe underestimates the collective information requests with which tax authorities have already demanded user lists from individual trading venues in the past.

Section 153 Correction or Section 371 Voluntary Disclosure: What the Difference Is

Both routes correct an incomplete tax return, but they start from different points and carry different consequences.

The duty to notify and correct under section 153 of the Fiscal Code applies where someone subsequently realises, before the assessment period expires, that a return they filed is incorrect or incomplete and that tax may be understated as a result. The wording of the statute requires this to be notified without delay, meaning without culpable hesitation. What is meant is the case without intent: an item was overlooked, an exchange was forgotten, a swap was mistakenly treated as tax free.

The voluntary disclosure under section 371 of the Fiscal Code, by contrast, is the route for cases where tax evasion is in play, meaning deliberate conduct. It leads to exemption from prosecution where three conditions come together: full correction for all unbarred tax offences of one type of tax over the last ten calendar years, no blocking ground, and timely payment of the evaded tax plus interest.

In practice the line between the two cases often cannot be drawn cleanly, because intent is an internal fact. Advisers therefore frequently frame a correction so that it simultaneously meets the requirements of an effective voluntary disclosure. That is the real reason a self-drafted letter to the tax office can be dangerous: it may satisfy section 153 while falling short of the completeness that section 371 demands.

Which Years You Have to Declare: Assessment Period and Limitation on Crypto Gains

Two periods run alongside each other, and they are regularly confused. One decides whether the tax office may still assess the tax. The other decides whether the offence can still be prosecuted.

The assessment period is set out in section 169 of the Fiscal Code. For income tax it is normally four years. In cases of reckless understatement it extends to five years, and in cases of tax evasion to ten years. On top of that comes the suspension of commencement: the period only begins at the end of the year in which the return was filed, and at the latest three years after the tax year. So if you never filed for 2018, you must expect the assessment for that year to still be open.

Limitation under criminal law follows its own rules and is irrelevant to the question of whether back tax has to be paid. What matters is the practical consequence: a year can still be open for tax purposes even though nothing threatens under criminal law. It still has to be paid, plus interest.

How to Work Out Which Years Are Open in Your Case

The starting point is unspectacular: dig out your own tax assessments from the last ten years and lay your trading history alongside them. What counts is the timing of every sale and every swap; the account balance at year end is irrelevant to this. Swapping one coin for another counts as a disposal of the first coin for tax purposes, even though no euro changed hands. It is precisely these swaps that are missing most often from old returns, because they do not feel like a sale.

The Blocking Grounds of Section 371(2): When a Voluntary Disclosure Comes Too Late

Exemption from prosecution does not arise where one of the blocking grounds named in the statute has already occurred. Among others, the law names notification of an audit order under section 196 of the Fiscal Code, notification that criminal or administrative fine proceedings have been opened, the appearance of an official for a tax audit, and discovery of the offence where the offender knew of it or had to reckon with it. A separate blocking ground applies as soon as the understated tax exceeds 25,000 euros per offence.

The blocking ground of discovery is the reason the reporting procedure from 2027 matters for this subject at all. An offence is discovered where the authority holds a suspicion concrete enough to make a conviction appear likely. A blanket data match is therefore not automatically a discovery. But anyone who has already received post from the tax office about specific crypto transactions should assume the clock has run out and take advice before sending any further letter.

The blocking ground of the audit order is equally underestimated. It bites for the audit period, and it does so from notification onwards, not only from the start of the audit. Anyone with an announcement of a field audit in their letterbox who then writes a voluntary disclosure will no longer achieve exemption from prosecution for the audited years.

Completeness Instead of a Partial Disclosure: Why Half a Correction Fails

Since 2011 there has been no such thing as an effective partial voluntary disclosure. The law requires correction in full, for all tax offences of one type of tax over the last ten calendar years. Translated, that means: anyone who reports only the gains from a single exchange and leaves out an account with a second provider has not made an effective voluntary disclosure but has handed the authority part of the evidence.

For crypto holdings this is the hardest requirement of all, because the traces lie scattered. The typical picture is one large exchange, a small secondary account from the early days, a decentralised application, a staking service and a hardware wallet whose transactions appear in no report anywhere. If one of these sources is missing, it is missing from the declaration.

If you first have to establish an overview, the sensible route is a portfolio and tax tool that merges transactions from several sources and produces a report for each year. Which providers can import which exchanges, wallets and protocols is shown in our comparison of crypto tax software and portfolio trackers. The tool does not replace advice, but it supplies the numerical basis without which no adviser can work.

The Most Common Mistake: The Forgotten First Exchange

Many holdings begin with a small account from the years 2017 to 2021, often at a provider that has since left the market or been taken over by another. That is exactly where the purchases sit that determine the acquisition cost of later sales. Without that data the gain cannot be evidenced, and without an evidenced gain the tax office estimates.

From 25,000 Euros of Evaded Tax: The Surcharge Under Section 398a

Where the understated tax exceeds 25,000 euros per offence, the exemption from prosecution falls away. The case is not lost as a result: section 398a of the Fiscal Code provides that prosecution is waived where the evaded tax plus interest is paid and an additional sum is settled on top. Under the wording of the statute this surcharge amounts to 10 percent of the evaded tax up to an evaded amount of 100,000 euros, 15 percent between 100,000 and 1,000,000 euros and 20 percent above 1,000,000 euros.

The surcharge is not refunded if the proceedings are later reopened after all; it can, however, be credited against a fine. What is decisive is the evaded tax, not the gain and certainly not the portfolio value. If you failed to declare 40,000 euros of gains, the tax on that will often fall below the threshold depending on your tax rate.

Which Records You Need From Exchange, Wallet and Tax Tool

A subsequent declaration is, in the end, an arithmetic exercise with supporting evidence. What is needed for each year is a complete transaction list with timestamps, the matching of acquisitions and disposals in order of acquisition, the prices at the relevant time and the fees. Added to that are the records for transactions that are not sales and still count for tax: staking income, lending interest, airdrops and mining rewards.

You obtain the transaction history from the trading venues themselves, usually as a file in the account area. Anyone whose account was with a provider that has since closed needs the support route and should start early. An overview of the regulated trading venues, including the question of who issues usable annual statements, is in our comparison of crypto exchanges. For wallets with no provider behind them, only the blockchain itself helps: collect addresses, export transactions, explain inflows.

A practical note on sequence: first establish the data basis, then calculate, then draft. Work the other way round and set up the letter to the tax office before the analysis, and you risk exactly the incompleteness on which the exemption from prosecution founders. Incidentally, the data basis also determines whether your holdings can evidence the conditions for a tax-free sale after the one-year holding period has elapsed at all.

What the Draft Bill of September 8, 2026 Changes About the Situation

On September 8, 2026 a draft bill from the German Federal Ministry of Finance became known which would in future treat crypto assets as investment income and subject them to the flat-rate withholding tax of 25 percent plus the solidarity surcharge, regardless of the holding period. Under the draft, the new rules would apply only to holdings acquired after December 31, 2026; for holdings acquired before that date the one-year holding period would remain in place. Automatic tax deduction by the service providers is not envisaged until 2028.

None of this has been enacted. A draft bill is a working document from the ministry, not a law; coordination within the federal government is under way, and no bill is before the Bundestag. For the current year 2026 the rule in section 23 of the Income Tax Act with its one-year holding period applies unchanged.

For the question of a subsequent declaration the draft changes nothing about the legal position of the past. It does change the urgency, because it directs the attention of the tax administration to a field that is becoming transparent anyway. Anyone with open years is therefore not choosing between two tax regimes, but between a correction on their own initiative and a correction after being asked.

Evasion Interest and Costs: What a Subsequent Declaration Really Costs

The back payment itself is only the first item. Interest comes on top, and here a close look at the statute pays off. Interest on additional tax claims under section 233a of the Fiscal Code has stood at 0.15 percent for each month since 2019, so 1.8 percent a year. For the remaining interest under the Fiscal Code, which includes evasion interest under section 235, half a percent for each month continues to apply, so 6 percent a year. Over eight or ten years that adds up considerably, and payment of the interest is a condition of the exemption from prosecution, not a later side effect.

Then there are the costs of advice. They depend on the effort of reconstruction and not on the portfolio value; a holding with twenty transactions is worked through in a few hours, a holding with several thousand transactions across five platforms is not. Prepare the data basis cleanly yourself and you will noticeably reduce this item.

What Happens If You Do Nothing

For the time being the assessment stays as it is. If an audit follows later, the blocking grounds have taken effect, the exemption from prosecution is lost, and on top of the tax and the interest criminal proceedings loom. For amounts below the de minimis thresholds such proceedings often end with a monetary condition; above them they do not. The tax itself falls away in none of these cases for as long as the assessment period is running.

Crypto Subsequent Declaration: What to Take Away

The legal position is confusing; the next steps are not.

1. Get your data basis together before you write anything to the tax office. Collect the trading history of all accounts and wallets from the last ten years and merge it. Which tools import several sources and issue annual reports is shown in our comparison of crypto tax software and portfolio trackers.
2. Request missing records now, not later. Exports from closed or acquired trading venues take weeks. Which providers supply usable annual statements is set out in our comparison of crypto exchanges.
3. Have the declaration drafted professionally once the figures are in place. Completeness across all years and all sources decides the exemption from prosecution, and it cannot be repaired afterwards. Calculate the expected tax burden in advance, for instance with the tools from our comparison of crypto tax software, so that the back payment plus interest does not become the second surprise.

The legal bases can be read in the original wording: voluntary disclosure in section 371 of the Fiscal Code and the reporting procedure at the Federal Central Tax Office.

(As of September 12, 2026. This article is not investment advice and not tax or legal advice. Prices and fee structures change; check the terms with the provider before you buy.)