Crypto taxes: what residents and cross-border workers need to know

Bitcoin, Ethereum & co: residents and cross-border workers, find out when your crypto gains are taxable and how to declare them in Luxembourg.

Cryptocurrencies like Bitcoin and Ethereum are attracting more and more investors in Luxembourg and the Greater Region. But here's the catch: your gains may be taxable, whether you're a Luxembourg resident or a cross-border worker. Here's what you need to know.

1. Luxembourg tax residents

If you're a resident, you're taxed in Luxembourg on all your worldwide income, and that includes crypto.

• Held for less than 6 months: any profit from selling is treated as speculative gain and taxed at the progressive income tax rate.
• Held for more than 6 months: the gain is tax-free.
• Watch out: if you're trading frequently, or it looks like a professional activity, the tax authorities may reclassify your gains as business income, which is fully taxable.

Example: You buy Bitcoin and sell it at a profit after 4 months, you'll need to declare that gain. Hold it for more than 6 months, and it's tax-free (unless it's considered a professional activity).

2. Cross-border workers in Luxembourg

If you're a cross-border worker, there's an important distinction:

• Tax residence: you're mainly taxed in your country of residence on crypto gains.
• Work in Luxembourg: only income from your job in Luxembourg is taxed here. Crypto gains fall under the tax rules of your home country (France, Belgium, Germany).

In short: if you're a cross-border worker, your crypto profits need to be declared according to the tax rules of where you live, not Luxembourg.

3. Record-keeping and documentation

• Always keep proof of your buys and sells (exchange statements, wallet records, invoices).
• Tax authorities may ask for a detailed transaction log (dates, amounts, purchase price, sale price, holding period).
• Some platforms already offer annual statements to make filing easier.

4. Key takeaways

• Residents: tax-free if you hold for more than 6 months (unless it's a professional activity).
• Cross-border workers: you must declare gains in your country of residence.
• Either way, keep clear records of all your transactions.