This content is published with the kind permission of the author, Dr. Niklas J.R.M. Schmidt of Wolf Theiss.
Transactions in cryptocurrencies
Individual investors (tax resident in your jurisdiction)
1) Are individuals taxed on gains on the sale of cryptocurrencies?
Yes, a sale of cryptocurrencies by individuals will give rise to a taxable event, irrespective of the holding period and irrespective of whether the cryptocurrencies qualify as private assets (Privatvermögen) or as business assets (Betriebsvermögen).
The tax basis is the difference between the sale price and the taxpayer's acquisition cost of the cryptocurrency.
The tax rate is 27.5%; however, the progressive income tax rate applies where the generation of income from the sale of cryptocurrencies constitutes a main focus of a taxpayer's business activity.
Corporate investors (tax resident of your jurisdiction)
2) Is cryptocurrency subject to yearly mark to market valuation?
Corporates holding cryptocurrencies have to capitalise them in their balance sheet at acquisition cost.
When classified as current assets, they must be capitalised at the lower of acquisition cost or market value, meaning that a mandatory write-down to a lower fair value has to be made.
When classified as fixed assets, a mitigated lower of cost or market value principle is applicable, meaning that a mandatory write-down to a lower fair value only has to be made in the event of an expected permanent impairment.
In the event of a recovery in value, a mandatory write-up has to be made up to a maximum of the acquisition cost.
3) Are corporates taxed on gains on the sale of cryptocurrencies?
Yes, a sale of cryptocurrencies by a corporate will give rise to a taxable event, irrespective of the holding period.
The tax basis is the difference between the sale price and the taxpayer's acquisition cost of the cryptocurrencies.
The tax rate is 23%.
Common questions around cryptocurrency and tax
4) Is payment for goods/services in cryptocurrencies a taxable event?
Yes, paying for goods/services in cryptocurrencies by individuals gives rise to a taxable event. The tax rate is 27.5%.
The tax basis is the difference between the fair market value of the cryptocurrencies transferred by the taxpayer as payment and his or her acquisition costs of these cryptocurrencies.
5) What is the tax treatment of cryptocurrencies received from mining?
Individuals engaging in the mining of cryptocurrencies are subject to income tax on the assets received. Taxation takes place at the time the taxpayer receives the cryptocurrencies.
The tax rate is 27.5%.
The tax basis is the value of the cryptocurrencies received. For the valuation, primarily the price quoted on an exchange is to be used. If no price is quoted on an exchange, then the price quoted by a broker is to be used. If such price is also not available, then the price mentioned in a generally recognised web-based list that is independent of the taxpayer is to be used. Electricity costs and depreciation charges for the mining equipment are not to be taken into account when calculating the tax basis.
The tax basis for income tax purposes (as just described) represents the acquisition costs of the cryptocurrencies received through mining, which are relevant when the cryptocurrencies are later sold by the taxpayer.
6) What is the tax treatment of cryptocurrencies received by airdrop?
Individuals receiving cryptocurrencies in an airdrop are not subject to income tax on the assets received. The cryptocurrencies received have an acquisition cost of zero, which is relevant when they are later sold by the taxpayer (at this point the entire value of the cryptocurrencies will be taxed).
The same tax treatment applies where cryptocurrencies are received in return for the provision of only insignificant services, such as sharing posts on social networks, filling out a questionnaire or using a specific product.
7) What is the tax treatment of cryptocurrency received from staking?
Individuals engaging in the staking of cryptocurrencies are not subject to income tax on the assets received in return for the stake. However, the cryptocurrencies received have acquisition costs of zero, which is relevant when they are later sold by the taxpayer (at this point the entire value of the cryptocurrencies will be taxed).
8) What is the tax treatment of lending in cryptocurrencies?
Individuals receiving cryptocurrencies (as interest in kind) for the lending of cryptocurrencies (as principal) are subject to income tax.
The tax rate is 27.5%; however, the progressive income tax rate applies where the cryptocurrencies are not being offered for lending to the public at large.
The tax basis is the value of the cryptocurrencies received. For the valuation, primarily the price quoted on an exchange is to be used. If no price is quoted on an exchange, then the price quoted by a broker is to be used. If such price is also not available, then the price mentioned in a generally recognised web-based list that is independent of the taxpayer is to be used.
The tax basis for income tax purposes (as just described) represents the acquisition costs of the cryptocurrencies received through lending, which are relevant when the cryptocurrencies are later sold by the taxpayer.
9) What is the tax treatment of a hard fork?
Individuals receiving cryptocurrencies in a hard fork are not subject to income tax on the assets received. The cryptocurrencies received have acquisition costs of zero, which is relevant when they are later sold by the taxpayer (at this point the entire value of the cryptocurrencies will be taxed).
10) What is the tax treatment of employee salary in cryptocurrency?
Individuals receiving cryptocurrencies as compensation under an employment contract are taxable as if they had been paid in fiat currency. The fair market value of the cryptocurrencies has to be determined on the date on which the employee receives them. This value also represents the acquisition costs of the cryptocurrencies received from the employer, which are relevant when the cryptocurrencies are later sold by the employee.
11) How are gifts of cryptocurrency taxed, including in-game rewards?
Individuals receiving cryptocurrencies as a gift are not subject to income tax. In these cases, the donee inherits the acquisition costs of the donor.
Individuals gifting cryptocurrencies to (i) a non-resident of Austria under domestic law or (ii) a resident of Austria under domestic law who is – under a double taxation treaty concluded with another country – treated as a resident of that country will be treated for income tax purposes as having sold their cryptocurrencies (exit taxation).
There is no gift tax in Austria.
12) Is there a tax-deferral when exchanging cryptocurrency/assets?
Yes, the exchange by individuals of cryptocurrencies for other cryptocurrencies does not give rise to a taxable event. The acquisition costs of the cryptocurrencies exchanged are transferred to the cryptocurrencies received. Any increase in value is only recognised as part of a subsequent realisation of the cryptocurrencies received.
13) Is there any transfer tax on the acquisition of cryptocurrencies?
No. There is no transfer tax on the acquisition of cryptocurrencies.
14) Is there obligations to declare cryptocurrency to tax authorities?
No. There is no obligation to declare cryptocurrencies to the tax authorities.
15) Are there reporting obligations for cryptocurrency transactions?
No. There are no tax reporting obligations for cryptocurrency transactions.
Certain service providers (including those with their legal seat or their place of management in Austria offering the exchange of cryptocurrencies into fiat currency and vice versa) are obliged to withhold income tax for their customers, remit these amounts to the tax authorities and file reports thereon.
The EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules, which will come into effect in 2026, will require all service providers, of whatever size and wherever located, to report on crypto-asset transactions carried out by clients residing in the EU.
16) How are cryptocurrency transactions treated for VAT purposes?
According to the Austrian Ministry of Finance, the exchange of fiat currency against bitcoins and vice versa is tax-exempt (cf. ECJ 22 October 2015, case C-264/14 – Hedqvist). From the guidance, it is unclear to what other cryptocurrencies this statement applies.
Initial coin offerings or ICOs (by issuers tax residents in your jurisdiction)
17) What is the tax treatment of the ICOs for issuers?
While the sale of tokens created by an issuer could give rise to a taxable gain, based on the difference between the sales price of the tokens and their acquisition cost, in practice it might be possible to avoid taxation where utility tokens are issued. In such cases, the issuer of the tokens owes a service to the purchaser, so that a liability may be recognised in the issuer's balance sheet that accordingly reduces the taxable profit.
18)What is the VAT treatment of the ICOs, including rules on vouchers?
Utility tokens will often be regarded as vouchers for VAT purposes. The sale of vouchers by entrepreneurs that entitle the purchaser to subsequently purchase goods or services of the issuer which have not yet been specified does not constitute a taxable transaction (a taxable transaction only exists if the type, content and scope of the future service can be precisely determined in addition to the entrepreneur providing the service). Vouchers are not only those in paper form, but also those in electronic form. Utility tokens can therefore also qualify as vouchers.
19) Are ICOs liable to any stamp duty?
No. ICOs are not liable to stamp duty.
Transactions in NFTs
Individual investors (tax resident in your jurisdiction)
20) What is the tax treatment for individuals of the creation of NFTs?
Individuals creating NFTs have to capitalise them at acquisition cost. Thus, the creation of an NFT by itself should not be a taxable event (this will happen at the time the NFT is then sold).
Corporate investors (tax resident in your jurisdiction)
21) What is the tax treatment for corporates of the creation of NFTs?
Corporates creating NFTs have to capitalise them in their balance sheet at acquisition cost. Thus, the creation of an NFT by itself should not be a taxable event (this will happen at the time the NFT is then sold).
22) Are NFTs taxed differently to cryptocurrencies?
Yes, the sale by an individual of NFTs qualifying as private assets gives rise to a taxable event if the NFT sold has been held for less than one year (otherwise the sale is not taxable at all). The sale by individuals of NFTs qualifying as business assets gives rise to a taxable event irrespective of the holding period.
The tax basis is the difference between the sale price and the taxpayer's acquisition cost of the NFT.
The progressive income tax rate applies.
23) Can tax be deferred when exchanging NFTs for other NFTs/crypto?
No. Individuals exchanging NFTs against other NFTs or against cryptocurrencies realise a taxable event. However, this only applies if the NFT exchanged has been held for less than one year (otherwise the exchange is not taxable at all).
The tax basis is the difference between the fair market value of the NFT exchanged and its acquisition cost.
The progressive income tax rate applies.
24) What is the tax treatment of gifted NFTs (incl. in-game rewards)?
Individuals receiving NFTs as a gift are not subject to income tax. In these cases, the donee inherits the acquisition costs of the donor.
There is no gift tax in Austria.
25) Is there any transfer tax when acquiring NFTs for consideration?
No. There is no transfer tax when acquiring NFTs for consideration.
26) Is it obligatory to declare NFTs to tax authorities?
No. There is no obligation to declare NFTs to the tax authorities.
27) Are there tax reporting obligations specific to NFT transactions?
No. There are no tax reporting obligations for NFT transactions.
28) How are NFT transactions treated for VAT purposes?
There is no guidance by the Austrian Ministry of Finance on the VAT treatment of the sale of NFTs. The majority view seems to be that a sale of NFTs amounts to the supply of a service.
