According to the guidance, published Tuesday by the Ministry of Finance, Germany will regard bitcoin as the equivalent to legal tender for tax purposes when used as a means of payment.
The Ministry of Finance based its guidance on a 2015 European Union Court of Justice ruling on value-added taxes (VAT).
The new German document considers cryptocurrencies as a legal method of payment. The document states that cryptocurrencies become the equivalent to legal means of payment.
According to the document, converting crypto into a fiat currency is a taxable miscellaneous benefit. However, an intermediary for the exchange will not be taxed. But when a customer buys a product with bitcoin, an article of the EU's VAT Directive will be applied to the price of bitcoin at the time of the transaction.
The document also states that payment fees sent to digital wallet providers or other services can be taxed. Miners will not be taxed, as their services are considered to be voluntary.
Traders, that buy or sell bitcoin in their own name as an intermediary will receive a tax exemption. At the same time, an exchange operating as a technical marketplace will not receive any such exemption.