Crypto Salary: Tax Expert Warns Freelancers About Common Pitfalls

Getting paid in cryptocurrencies as a freelancer is no longer a niche practice – but the tax treatment is complex and error-prone. Tax expert Joseph Ledovskich from Accountable points this out in an interview with BTC-ECHO ^[1].

The central issue: For the tax authorities, what always counts is the euro value at the time of payment receipt. For example, anyone who receives 0.05 ETH at a rate of 3,000 euros must record 150 euros in business income ^[1]. Ledovskich considers several typical mistakes particularly critical: Many self-employed individuals inadequately document the euro conversion or mix private and business wallets, which can lead to estimates by the tax authorities ^[1].

Value-added tax also remains mandatory for crypto payments and must be shown in euros on the invoice. Another misconception concerns the one-year holding period: Coins in business assets are subject to full taxation upon sale – regardless of how long they were held ^[1].

Tax authorities now use specialized software such as Chainalysis to track transactions. Exchanges like Binance or Coinbase share user data ^[1]. Ledovskich advises meticulous documentation with date, time, exchange rate data, and transaction IDs to avoid problems.