TL;DR
- Germany is preparing a bill to tax cryptocurrency gains on assets acquired after December 31, 2026.
- Holdings acquired before that date would retain the current regime, which allows tax-free sales after 12 months of holding.
- Germany’s Federal Ministry of Finance estimates collecting approximately €160 million in additional revenue in 2028, a figure that could grow to €350 million annually by 2031.
The government of Germany is advancing a tax reform that would put an end to one of the most attractive tax benefits for cryptocurrency investors in the country: the ability to sell bitcoin, ethereum and other crypto assets without paying taxes after holding them for more than one year.
A bill from the Federal Ministry of Finance, led by Vice Chancellor Lars Klingbeil, establishes that gains on cryptocurrencies acquired from January 1, 2027 onward will be subject to taxes regardless of the holding period, according to a DTS report citing the German newspaper Die Welt.
The proposed regime would equate bitcoin and ethereum with traditional financial instruments under the withholding tax system known as Abgeltungsteuer, which applies a flat rate of 25% plus a solidarity surcharge of 5.5% on the tax, resulting in an effective rate of 26.375% before the church tax.
Germany Changes the Rules of the Game for Crypto Investors
Holdings acquired before December 31, 2026 would retain the current tax treatment. The proposal would also classify income from lending and staking as capital income. NFTs, certain stablecoins, security tokens and some real-world asset-linked tokens would fall outside the new framework.
Short-term traders could benefit from the change, as they currently pay tax at their personal income rate, which reaches a ceiling of 45% for higher-income taxpayers. The law would take effect in January 2027, with an additional deadline until 2028 for service providers to adapt their systems and implement automatic withholding.
In the event that investors cannot verify purchase prices or acquisition dates, the flat rate of 25% would be applied directly. Germany’s Federal Ministry of Finance projects that the measure will generate approximately €160 million in additional tax revenue during 2028, with a projection that could reach €350 million annually by 2031.
