Bitcoin Lending in Austria: When Tax Falls Due

Bitcoin lending in Austria: when the ongoing income is already taxed

Anyone who lends Bitcoin through a crypto exchange, a lending platform or a DeFi protocol usually receives a recurring payment in return. Depending on the product, providers call this interest, rewards, yield or earn income. For Austrian tax purposes, the name of the offer carries no weight.

Where Bitcoin is made available to another market participant for consideration, the payments received generally count as ongoing income from cryptocurrencies. Tax normally falls due as soon as the investor can dispose of the rewards. Selling the Bitcoin received for euros is not a requirement.

That creates a particular risk for investors. The tax is calculated on the euro value at the moment of receipt. If the Bitcoin price falls afterwards, the tax bill can exceed the value the coins still hold later on.

What is Bitcoin lending?

In Bitcoin lending, the investor hands over coins for a limited period to a platform, a company, a borrower or a decentralised protocol. A payment is made in return.

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