Does anyone use [nexo.io](https://nexo.io) or a similar service to earn interest on deposited FIAT and/or cryptocurrencies. I’m struggling to find out how these gains will be taxed in Luxembourg. Anyone?

9 comments

  1. I have been earning interest on my crypto via BlockFi for a year now.

    As far as I know, as long as your interest payments remain in crypto and are not converted into fiat, it is not subject to taxation because no profit was realised.

    Someone else will surely explain it better…. But that’s my idea of how it works!

  2. Earnings made through crypto currencies count towards capital gains in Luxembourg. If you have been holding on to them for more than 6 months, you don’t have to pay any taxes you can keep all. However if you sold any before 6 months have passed those gains count towards your yearly income which is subject to tax.

  3. Interest incomes are taxable. Whether they come from fiat or crypto.
    For crypto (i.e. staking), I would say (to take with a pinch of salt and have it confirmed with the tax admin or your tax advisor) that you consider the fiat value of the crypto “interest” income at the time is earned (e.g. 1 UNI earned on Compound today so ~€16) and consider it as interest income taxable. If later you sell earned crypto them you consider the 6 months period for “capital gains”

  4. Tax authority doesn’t have the scope yet for crypto interest, but interest is usually taxed at 20% withholding tax.

    Profits from selling crypto is not taxed if held for more than 6 months. Careful: transfer from crypto to crypto breaks the holding period.

  5. [not tax advice, just my interpretation]

    Income is interest, dividends etc. I believe income needs to be reported and the first €1500 income is tax-free. (Please check guichet.lu for clarity)

    Capital gains is price appreciation of the asset (i.e. when you buy low and sell high). Capital gains (for stocks, crypto, other movable assets) for assets held >6m is not taxable. For assets held for <6m, the first €500 is not taxable.

    Edit: link https://guichet.public.lu/en/citoyens/impots-taxes/patrimoine-financier/banque-dividende-interets/achat-vente-actions.html

    Of course, please do your research (guichet.lu is a good resource). I just share my interpretation, I am not a tax advisor.

  6. Interest are taxed but the capital held 6 months is not. Crypto to crypto trades are taxed like any crypto to fiat when done below 6 months.
    The most important is to try your best to declare everything.

    If you try to say I held the interest for 6 months to not pay taxes on that and you have a control you’ll have issues.

    This is not hard at all to declare. Maybe the value in euros can be determined using different techniques but as long as you are consistent it should be ok.

    Gains on liquidity pool like uniswap are a lot more complicated…

  8. What info you’d need to share with tax office for staking? Just a printout of the rewards? If you hold your crypto in a cold wallet can you only declare what you have accumulated during the year?

  9. Some good answers here. Also not yet sure what the ruling is on interest. But I do know that crypto to crypto trades break the 6month holding period which is meh! You guys should join the Crypto Luxembourg Telegram group as well. Some interesting conversations going down there too: https://t.me/joinchat/xqk9rkN5ygQyOGZk

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