How Is Crypto Staking Taxed? The Rules in 5 Countries
The short version: staking rewards are taxable income on the day you receive them, in almost every country. You owe income tax at the token's fair market value then, and that value becomes the cost basis for future capital gains. The country where this gets weird is Germany — a 2024 court ruling stretched the holding period for exchange-staked coins to 10 years.
Staking is the quiet giant of crypto tax questions. Everybody earns rewards; almost nobody understands the tax treatment until they file. Here's the honest breakdown, country by country, including the parts that will surprise you.
The principle that applies everywhere
Every tax authority treats new tokens you earn from staking as income, not as a free gift. The moment the reward hits your wallet, you have taxable income equal to what those tokens are worth in your local currency on that day. That value is also your cost basis for the tokens — if the price later doubles and you sell, you pay capital gains tax on the doubling, not the whole amount.
What changes between countries is the income category, the rate, and — critically — whether staking resets or extends the holding period of the coins you staked. Let's go through each.
🇺🇸 United States
The IRS settled this in 2023 after the Jarrett case: staking rewards are ordinary income at fair market value on the day they're received. Report them on Schedule 1 (line 8z, "Other income") or as self-employment income if staking is your business. The cost basis of each reward is its value at receipt.
Staking your original tokens does not reset their holding period. If you bought ETH in 2023 and staked it, sold the staked ETH in 2026, that's a long-term gain. The reward tokens you earned in 2024, though, have their own clock starting the day each reward was paid out.
Relevant authority: Revenue Ruling 2023-14 (validating income treatment of staking rewards).
🇬🇧 United Kingdom
HMRC treats staking rewards as miscellaneous income (or trading income if you're running a staking business), taxed at your income-tax rate. The value is sterling at receipt, and that becomes the Section 104 pool's acquisition value for the reward tokens.
Staking does not reset the holding period of the underlying tokens. The Section 104 pool keeps accumulating; when you sell, HMRC matches against the pool. See how Section 104 pooling works for the mechanics.
Source: HMRC Cryptoassets Manual (staking and lending rewards).
🇩🇪 Germany — the special one
Germany is the only country here where staking can actively hurt your holding period. The Federal Fiscal Court (BFH) ruling of October 2024 (case IX R 3/22) drew a line:
- Self-custody staking (you run the keys): the normal rules apply. Short-term gains are taxable if held under 365 days; gains after 365 days are exempt.
- Exchange or lending-platform staking (Kraken, Coinbase, etc.): the 365-day exemption does not apply — gains are taxable regardless of holding period, up to a 10-year holding period under §23 EStG.
The court's logic: when you hand your coins to a third party for staking, you've effectively entered into a "performance-based income" arrangement, which falls under the longer holding period rules for capital gains. This is a big deal for German users who staked on exchanges expecting the 1-year exemption.
The staking rewards themselves: under §22 EStG, they're "other income" (Sonstige Einkünfte) taxable at your income-tax rate, but only if the total of all such income exceeds the €256 annual exemption.
This is exactly the kind of detail covered in the German 1-year rule guide.
🇨🇦 Canada
The CRA treats staking rewards as property income (or business income if staking is your business), taxable at fair market value in CAD on receipt. The cost basis of the reward tokens = that same CAD value.
Staking does not reset the adjusted cost base (ACB) of the underlying coins. The rewards simply join the ACB pool. How ACB works is the key concept here.
Source: CRA guidance on digital currency.
🇦🇺 Australia
The ATO is explicit: staking rewards are ordinary income at market value on the day received. Report them in your income tax return. The cost basis of the rewarded tokens is that value.
Staking does not reset the 12-month CGT discount holding period of the staked coins. If you later sell the staked tokens, the original acquisition date still applies.
Source: ATO guidance on crypto assets.
Comparison table at a glance
| Country | Reward taxed as | Taxed when | Staking resets holding period? |
|---|---|---|---|
| US | Ordinary income | On receipt | No |
| UK | Miscellaneous income | On receipt | No |
| Germany | Other income (§22) | On receipt | Exchange staking: yes (10 yrs); self-custody: no |
| Canada | Property income | On receipt | No |
| Australia | Ordinary income | On receipt | No |
The trap nobody warns you about
Here's the one that bites people: you stake ETH at $2,000, earn 0.5 ETH reward worth $1,000 (income tax due on $1,000). Then ETH drops to $1,000. You sell the reward for $500. You still paid income tax on $1,000, and now you have a $500 capital loss. The income tax is not refundable just because the price fell — only the capital loss can offset gains.
This is why staking in a down market can create a real cash-flow problem: you owe tax on value you never realized in fiat.
What records to keep
- Date and amount of every staking reward received
- Fair market value in local currency on the receipt date
- The wallet or exchange that paid the reward
- Which tokens you staked and whether it was self-custody or exchange
If you're using the CSV batch importer, export your staking rewards from the exchange and the import will value each row at its date. For per-trade tax estimates on any later sales, the country calculators will give you the gain and rate.
General information, not tax advice. Staking rules are still evolving — Germany's BFH ruling is the most recent major change. Check your local tax authority's latest guidance before filing.
FAQ
Is staking income taxable?
Yes, in most countries. Staking rewards are taxed as ordinary income at their fair market value on the day you receive them, not when you sell them. The cost basis of the received tokens becomes that same fair market value. The exact category varies by country: ordinary income in the US, miscellaneous income in the UK, other income in Germany, property income in Canada, and ordinary income in Australia.
Do I pay tax on staking rewards if I never cash out?
Yes. Receiving the reward is the taxable event, even if you hold the tokens and never convert them to fiat. You owe income tax on the value at receipt. When you later sell the rewarded tokens, you then also owe capital gains tax on any price appreciation from the receipt value.
How does staking affect the holding period of my original tokens?
In most countries (US, UK, Canada, Australia), staking does not reset or extend the holding period of the tokens you staked — the clock keeps running. Germany is the major exception: after the 2024 BFH ruling, tokens staked through an exchange or lending platform have their holding period extended to 10 years; only self-custody staking keeps the normal 1-year exemption.