Germany Prediction Market Taxes

How Germany Taxes Prediction Markets

In Germany, prediction market gains are taxed at a 26.38% rate. Losses can offset gains.

Report through ELSTER. Filing deadline: July 31.

26.38%

Flat rate on net gains

First €1,000 exempt (Sparerpauschbetrag)

How to File

1. Log in to ELSTER (elster.de) with your certificate.
2. Go to Anlage KAP (capital income).
3. Report net gains under Zeile 7 (Kapitalerträge).
4. Sparerpauschbetrag (€1,000/€2,000 joint) is applied automatically.
5. Convert USD to EUR using ECB rate on settlement date.
6. Submit by July 31 (or extended deadline with a Steuerberater).

Filing deadline: July 31

How are prediction markets taxed in Germany?

Prediction market gains are treated as capital income (Kapitalerträge) and taxed at the flat Abgeltungsteuer rate of 25% plus 5.5% solidarity surcharge (total 26.375%). Church tax may apply on top.

What is the Sparerpauschbetrag?

A tax-free allowance of €1,000 per person (€2,000 for married couples filing jointly) on capital income. Your first €1,000 in gains is tax-free.

Can I deduct my losses?

Yes. Losses from prediction markets can offset other capital gains within the same tax year. Unused losses carry forward.

Does church tax affect my rate?

If you pay church tax (Kirchensteuer), it adds 8% (Catholic in most states) or 9% (Protestant) on top of the Abgeltungsteuer, but the base rate is slightly reduced. Total effective rate: ~27.82% to ~27.99%.