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How a voluntary disclosure leading to exemption from punishment works in practice, which conditions apply and what it costs is set out on our service page Voluntary disclosure.
In recent years cryptocurrencies have developed from a niche technology into a global financial phenomenon. More and more investors are investing in digital currencies such as Bitcoin (BTC), Ethereum (ETH) or memecoins such as Dogecoin (DOGE). While the gains from successful trades can be considerable, many investors overlook a decisive point: their tax obligations. Many investors do not know that crypto gains are taxable. For that reason they do not report their transactions. Mistakenly they assume that the tax office will not find out. If this is not reported, there is crypto tax evasion, a serious matter under tax criminal law. But with a voluntary disclosure submitted in good time, you can avoid penalties and make up for your tax obligations.
The taxation of cryptocurrencies is a complex field, and not every investor is aware that all gains realised are in principle taxable. Anyone who has not taxed their crypto gains in the past risks criminal prosecution for tax evasion.
But there is a way out: the voluntary disclosure offers the possibility of correcting tax evasion retrospectively, and without criminal consequences. In this article you will learn which conditions must be met for an effective voluntary disclosure and why the topic is relevant for all crypto investors.
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Tax liability for cryptocurrencies: the BFH ruling of 2023
With its judgment of 14 February 2023, the Federal Fiscal Court (BFH) expressly addressed the tax treatment of cryptocurrencies for the first time. In its judgment the BFH clarifies that:
For investors this means: anyone who does not declare their crypto gains is acting unlawfully and risks tax criminal proceedings.
But the authorities are now going further still:
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What is tax evasion?
Crypto tax evasion exists where gains from cryptocurrencies are not declared or are declared incorrectly.
What is a voluntary disclosure?
Anyone who has committed crypto tax evasion can avoid criminal prosecution through a voluntary disclosure.
A voluntary disclosure is a declaration leading to exemption from punishment by which a person discloses their tax evasion to the tax office and at the same time pays the evaded tax.
The aim of the voluntary disclosure is to meet the full tax liability and to avoid prosecution.
But take care: a voluntary disclosure only works if it is complete and certain conditions are met.
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Conditions for an effective voluntary disclosure
For a voluntary disclosure to be valid before the tax office and to have the effect of exempting from punishment, various conditions must be met:
1 The disclosure must be complete
2 No blocking grounds under Section 371 (2) AO
A voluntary disclosure is not always possible. It is ineffective in the following cases:
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Step 1: create an overview of your transactions
A voluntary disclosure requires that all transactions relevant for tax of the last 10 years are documented completely and prepared correctly. With cryptocurrencies in particular this can be a challenge, because trades often take place across several exchanges or wallets.
My recommendation: use CoinTracking, one of the leading tools for managing crypto transactions. With CoinTracking you can:
If you need help with the setup or with preparing the data, we are at your side. My crypto tax advisory service supports you in preparing your transactions and ensures that all details are correct, which is the basis for an effective voluntary disclosure.
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Step 2: learn how to use CoinTracking
To make sure that you record your transactions correctly, we additionally offer you our online course. In this course you learn:
Here you can go to the online course
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Practical example: voluntary disclosure in the crypto field
An investor has been investing in Bitcoin, Ethereum and memecoins since 2016. He has realised high gains but never declared them in his tax return. Now, in 2024, he learns that the tax office is requesting data from crypto exchanges and that he could potentially be prosecuted for tax evasion.
The correction period
The investor must now:
Subsequently declare all undeclared crypto transactions.
Pay the evaded tax including interest.
Obtain professional support for a complete disclosure.
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Conclusion: a voluntary disclosure saves your future
Anyone who does not declare crypto gains risks high penalties and lengthy tax criminal proceedings. With a voluntary disclosure you can clean up your situation, provided it is submitted correctly and completely.
Important steps:
Create an overview of your transactions, ideally with CoinTracking.
Document all gains and losses relevant for tax of the last 10 years.
Obtain professional support for preparing the voluntary disclosure.
My crypto tax advisory service supports you at every step. Contact me now for a no-obligation initial consultation.
Contact me for individual advice!
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Frequently Asked Questions on voluntary disclosure
When does a voluntary disclosure lead to exemption from punishment?
When it is complete, covers all tax offences of one type of tax that are not time-barred, and is made in good time, that is, before the offence has been discovered or an audit has been announced. The conditions are set out in Section 371 AO. An incomplete voluntary disclosure offers no protection and can make the situation worse.
What does a voluntary disclosure cost in addition to the tax?
In addition to the back payment of tax, evasion interest is charged. From 25,000 euros of evaded tax per offence, Section 398a AO additionally requires a penalty surcharge of 10 to 20 percent for prosecution to be waived. The overall burden is almost always lower than criminal proceedings.
How far back do I have to file corrected declarations?
At least for all years that are not time-barred, in cases of tax evasion generally the last ten years. That is precisely where the work lies: old wallets, closed exchanges and missing histories have to be reconstructed, because gaps endanger completeness and with it the exemption from punishment.
Is it already too late for a voluntary disclosure?
As long as the tax office has not discovered your offences and no audit has been announced, generally not. With the automatic exchange of data by exchanges from 2026, however, the window is closing increasingly. Anyone who wants to act should do so before the first enquiry from the authorities.
