How is lending taxed in Germany?
In short
Lending crypto isn't a disposal: you let others use your tokens in return for interest, on any chain. The tokens keep their acquisition date and their cost basis, and the one-year holding period keeps running. What's taxable is the interest. It's income under § 22 Nr. 3 of the Income Tax Act (EStG), at its euro value when you receive it, and at the end of each year at the latest. If your income of this kind, staking rewards included, stays under €256 in the year, you pay no tax on it.
Borrowing tokens yourself against collateral isn't income. The borrowed tokens count as acquired at their market value, and repaying disposes of the tokens you repay with. If your collateral is liquidated, that's a sale under § 23 EStG.
- As of:
- Based on:
- § 22 EStG, § 23 EStG, BMF letter of 6 March 2025
What is lending?
You lend tokens to people who borrow them against collateral, and you earn interest for it. The finance ministry's letter of 6 March 2025 puts it this way: crypto assets are handed over for use in return for a payment (paragraph 26). A borrower puts up tokens of their own as collateral, worth more than the loan. If their value falls too far, the collateral is liquidated.
Where you lend changes how the interest reaches you, not how it's taxed. There are three ways:
- A poolKamino, marginfi, Jupiter Lend, Aave
- You lend into a pool, and others borrow tokens from it against collateral. You get a receipt for this, such as an aToken on Aave or a share in your account on marginfi, and it grows with the interest. TaxMaxi reads the receipt as a claim on the same tokens, not as a swap (paragraph 26).
- A vaultKamino Vaults
- A vault lends your tokens to several pools for you and gives you shares in return. As long as it gives back the same tokens, TaxMaxi reads the deposit like one into a pool: lent, not sold.
- Lending on an exchangeBinance, Bitfinex, Bybit
- The exchange lends your tokens for you and credits you the interest. It's income on the day it's credited to you, at that day's price (paragraph 65).
For tax, all that counts is what happens to your tokens: lent isn't sold, interest is income, a loan is an acquisition, and repaying it is a disposal.
An example in euros
Take USDC, though the math works the same with ETH, SOL or any other token. You buy 2,500 USDC in June 2024, lend them into a pool on 5 July, and withdraw everything with the interest on 31 December 2025. The interest isn't paid out. It makes your receipt grow, which is why it counts at each year end. The euro values are assumed. Here's how TaxMaxi works out the interest:
- 1 June 2024Bought 2,500 USDC for €2,330.00
- 5 July 2024Lent: 2,500 USDC, not a disposal
- 31 December 2024Year end: 110.88 USDC interest accrued, worth €106.50
- 31 December 2025Withdrawn: 2,740.625717 USDC, of which 2,610.88 USDC back, not a new acquisition
- 31 December 2025Interest on withdrawal: 129.745717 USDC, worth €110.50
- Interest 110.88 USDC at year end, at the price of 31 December 2024
- €106.50
- Income 2024 under the exemption limit of €256
- €106.50
Interest 2024
- Interest 129.745717 USDC on withdrawal on 31 December 2025
- €110.50
- Income 2025 under the exemption limit of €256
- €110.50
Interest 2025
Each year's interest stays under the exemption limit of €256 for income like this. If, together with staking rewards and other income under § 22 Nr. 3 EStG, it's your only income of this kind in the year, you pay no tax on it. From €256 the whole amount is taxable, at your personal tax rate.
Worked out by TaxMaxi's tax engine, on the same principles as for your wallet.
Lending on your chain
Each protocol's page shows how it records your deposit, whether the year-end balance can be looked up, and when TaxMaxi comes back to you with a question, using a real deposit from a public wallet.
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SolanaBlockchain
How is lending on Kamino taxed in Germany?
How is lending on marginfi taxed in Germany?How is lending on Jupiter Lend taxed in Germany? -
EthereumBlockchain
How is lending on Aave taxed in Germany?
More topics: Bridges, Liquidity Pools, Staking. All topics at a glance: DeFi taxes in Germany.
The legal basis
How Lending is taxed is set by the Income Tax Act (§ 22 EStG and § 23 EStG). How tax offices apply this to crypto is set out in the finance ministry's letter of 6 March 2025, which binds them. It applies the same on every chain.
The letter is divided into numbered paragraphs (Randnummern). Each principle below says where to find it; a click opens the letter at that spot.
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1
Lent tokens
If you lend tokens to a lending protocol, you let it use them and don't dispose of them. They keep their acquisition date and cost basis. The receipt token you get for them is only your claim on those same tokens, not a second token, and what comes back of the lent tokens isn't a new acquisition.
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2
Interest from lending
Interest from lending is income under § 22 Nr. 3 EStG at its market value when received, and each interest token gets its own acquisition date. If the interest grows only in the price of your receipt token, it counts at the latest at the end of each year, at the price of 31 December, and the rest when you withdraw the tokens.
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3
The exemption limit (Freigrenze) for income
Income from other services under § 22 Nr. 3 EStG is tax-free if it stays under €256 in the year.
See the BMF letter, paragraph 45
- 4
- 5
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6
Repaying a loan
When you repay a loan, you dispose of the repaid tokens at their market value. With a stablecoin loan that gives hardly any gain or loss; with a volatile token there can be one. What you repay beyond the amount you borrowed is the interest: it's disposed of the same way and is a private cost that isn't deducted anywhere.
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7
Liquidation
If a liquidator takes your collateral because your loan has grown too large, you dispose of it. The proceeds are the value of the debt the liquidator paid off with it, and the liquidator's premium is your loss. If the acquisition was less than a year ago, the gain or loss counts.
Common questions
Is lending taxable?
The lending itself isn't: you let others use your tokens (paragraph 26) and don't dispose of them. The interest is taxable. It's income under § 22 Nr. 3 EStG, at the market price when you receive it (paragraph 65). You only pay tax on it once your income of this kind reaches €256 in the year. If you later sell or swap the interest, a gain on it within a year counts under § 23 EStG.
Do I pay tax on interest I haven't withdrawn?
Yes, at the end of the year at the latest. Many protocols don't pay interest out and let your receipt grow instead. The BMF letter counts income from lending when you receive it (paragraph 65), and whatever you haven't collected yet at the end of the year at the latest (paragraph 48a). So TaxMaxi reads the balance on each 31 December. Where the blockchain no longer shows it, TaxMaxi counts the interest when you withdraw and notes that in the report.
What is the exemption limit (Freigrenze) for lending interest?
€256 a year, for all income from other services under § 22 Nr. 3 EStG together: lending interest, staking rewards and the like (paragraph 45). It's an exemption limit, not an allowance (Freibetrag). Stay under it and all of it is tax-free. Reach €256 and the whole amount is taxable. The €1,000 for gains from private sales is a separate limit.
Does lending extend the holding period to ten years?
No. For currency and payment tokens like ETH or SOL, the BMF letter rules out the ten years (paragraph 63). The one-year holding period for the lent tokens keeps running from the purchase, including while they're lent, and after more than a year a sale is tax-free. Each amount of interest has its own one-year holding period, from the day you receive it. For tokens you acquire from 2027 on, a finance ministry draft would drop the holding period: What's set to change from 2027.
Is a receipt token a swap?
TaxMaxi doesn't read it that way. For your deposit you often get a token like aEthWETH on Aave or jlUSDC on Jupiter Lend. It's only your claim on the same tokens plus interest, not a second token: the lent tokens keep their acquisition date, and what comes back of them isn't a new acquisition. The BMF letter says nothing explicit about such tokens. If you sell or send the receipt itself, that's a different matter, and TaxMaxi asks you what happened.
What happens for tax when I borrow tokens?
The borrowed tokens are yours to use: you can spend or swap them. When you take the loan they count as acquired at their market value, and they aren't income. When you repay, you dispose of the tokens you repay with. With a loan in USDC that makes hardly any gain or loss, and with a token whose price moves it can make one. Whatever you repay beyond the loan is interest: a private cost that isn't deducted anywhere. The BMF letter says nothing explicit about loans, so TaxMaxi follows what it says about acquisitions and swaps.
What happens in a liquidation?
If your loan grows too large for your collateral, a liquidator takes part of the collateral and pays off part of your debt in return. For tax, you sell the tokens taken, and the proceeds are the value of the debt paid off. The liquidator's premium is your loss. If you bought the tokens less than a year ago, the gain or loss counts (paragraph 53). Someone else sends a liquidation, so it often isn't in your wallet, only in your position's history.
What do I need to keep for the tax office?
For each loan of your tokens: when it began and ended, which tokens it was, how much interest it brought, and on what terms (paragraph 102). Your tax return shows the total of your income of this kind for the year, and you should be able to show how it came about if asked. TaxMaxi works out each deposit and each amount of interest on its day and sums them up in the report.
Sources
- § 22 EStG
Other income: lending interest and the €256 limit in Nr. 3
- § 23 EStG
Private sales: the one-year holding period and the €1,000 limit
- Finance ministry's letter of 6 March 2025
How tax offices tax crypto assets, as a PDF from the finance ministry
- Aave documentation
How Aave's pools, aTokens and liquidations work
- Kamino documentation
How Kamino Lend and the Kamino Vaults work
This page explains how TaxMaxi calculates. It is not tax advice and does not replace a tax advisor.