Financial Basics : Which Additional Income Is Tax-free?

No matter whether you are an employee, a pensioner or a civil servant - anyone who receives low additional income can look forward to a tax advantage, which is known as hardship compensation.

However, this hardship compensation no longer plays a role for interest or other capital gains. Even if you trade cryptocurrencies or make corresponding profits because you have correctly assessed the market, you do not automatically have to pay tax on the profit - the only question here is when the coins were acquired.

410 Euros Are Taxi-free 

The employee can collect additional income of 410 euros tax-free per year. These 410 euros also include income from pensions, rents and entrepreneurial activities. This is also the case if you offer one or two online seminars and make a profit of 400 euros at the end of the year. It is important to document the expenses. This means that the 410 euro limit is not about earnings, but ultimately only about the actual profit.

If you earn 1,000 euros a year as a copywriter, but have corresponding travel costs or printing costs or electricity costs, so that the expenses are in the region of 600 euros, you ultimately have a net profit of 400 euros. Expenditures must therefore be clearly broken down so that no more taxes are paid than necessary. If the annual income is over 410 euros but remains below the limit of 820 euros, the taxation is more lenient. Here we are talking about hardship compensation, which applies equally to pensioners and civil servants.

How Do You Tax Profits That You Have Made With Bitcoin And Co.?

To date, interest, capital gains, dividends and other capital gains have also been tax-privileged or even tax-exempt up to this limit. Since 2014, however, different rules have applied. In the summer, the Law on adapting national tax law to Croatia's accession to the EU and on changes to other tax regulations came into force - this new law then regulated the new restrictions. If you speculate with cryptocurrencies, for example, completely different regulations have to be taken into account.

So anyone who speculates with Bitcoin about Bitcoin Revolution should take into account that what matters here is not necessarily the amount of profit, but rather the question of when you invested your money. Because with cryptocurrencies, the so-called holding period counts - and this is one year. So if you bought a Bitcoin in February 2019 and sold it in June of the next year, the capital gain is not taxable. This means that the capital gain is tax-free - you can look forward to a 100% profit.

However, if you bought three coins and sold two after three months, the capital gain resulting from the sale of the two coins is taxable. But only if the profit exceeds 600 euros - because that is how high the annual exemption limit is. It should be noted that the exemption limit cannot, however, be equated with the exemption amount. If you exceed the exemption limit, the entire amount is taxable. At 620 euros that would be 620 euros. With an exemption amount it would only be 20 euros - i.e. the amount that would be above the exemption amount.