Crypto Losses: Should You Declare Them?
Are your crypto investments at a loss? Find out why and how to declare your capital losses to optimise your tax situation.
Written by Elena Marchetti
Tax specialist in digital assets
Are crypto losses deductible?
Yes, in most European countries, crypto capital losses can be offset against capital gains from the same tax year. In France, losses reduce the overall taxable base. In Germany, they can be carried forward to future years. Not declaring your losses means paying more tax than necessary.
How to calculate your losses
Losses are calculated using the same method as gains (PMPA, FIFO, LIFO depending on your country). Taxes Crypto automatically calculates your gains and losses transaction by transaction and presents the net result in your PDF tax report.
Carrying losses forward to future years
Some countries allow unused losses to be carried forward to future tax years. In Germany, capital losses can be carried forward indefinitely. In France, the offsetting mechanism only applies within the current year. Check the specific rules for your country.
Tax strategy: harvesting your losses
Tax-loss harvesting involves intentionally selling positions at a loss to reduce your taxable base, then potentially buying back the same assets. This strategy is legal in most countries but subject to certain restrictions. Taxes Crypto helps you identify loss-making positions in your portfolio.
Loss carryforward: how many years?
The ability to carry forward crypto losses varies considerably in Europe. In France, losses on digital assets are not carryable — they only offset gains from the same calendar year. In Germany, losses can be carried forward indefinitely. In Spain, losses can be carried forward for 4 years. In Italy, also 4 years. Knowing these rules is essential for planning your disposals.
Tax-loss harvesting: optimization strategy
Tax-loss harvesting involves intentionally realizing latent losses before the end of the tax year to offset realized gains. For example, if you have 5,000 EUR in gains and an ETH position at a 3,000 EUR loss, selling the ETH reduces your taxable base to 2,000 EUR. You can buy back immediately (no wash sale rule in Europe, unlike the USA).
Losses and different income categories
In most European countries, crypto losses can only offset crypto gains. In France, losses on digital assets don't offset salary income or real estate capital gains. In Germany, losses from private disposal transactions only offset gains of the same nature. This compartmentalization between income categories is often misunderstood.
Documenting your losses with Taxes Crypto
For a loss to be fiscally recognized, it must be documented: transaction date, purchase price, sale price, and loss calculation according to the official method. Taxes Crypto automatically generates this documentation in your tax report PDF, with details of each loss-making disposal.
Official legal sources
This article is provided for informational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified professional for your personal situation.
Elena Marchetti
Tax specialist in digital assets
Elena Marchetti is a European tax specialist focused on cryptocurrency taxation. Holding a Master's in Finance and certified as a tax advisor, she has been guiding crypto investors since 2018 through their tax obligations across Europe.
Crypto taxation · European regulation · DAC8 · MiCA
Calculate your crypto taxes now
Connect Binance, import your transactions and generate your compliant tax report in minutes.
Start for free