TLDR
- Germany’s Finance Ministry has drafted a proposal to tax crypto gains at a flat 25% rate from 2028
- The new rules would apply to crypto assets bought after January 1, 2027
- Current law exempts crypto held for more than one year from any tax
- The government expects the measure to raise around €350 million in additional revenue
- Crypto losses could be offset against stock and other securities losses under the new system
Germany is moving to end one of Europe’s most crypto-friendly tax rules. The country’s Finance Ministry has drafted a proposal to apply a flat 25% tax on cryptocurrency gains starting in 2028.
🚨GERMANY MOVES TO KILL THE ONE-YEAR CRYPTO TAX BREAK!
The Federal Ministry of Finance is pushing a draft that would treat crypto gains as capital income and tax them at a flat 25%, ending the rule that sales after 12 months are tax-free.
The change is aimed at 2027 and is not… pic.twitter.com/QyqUFssW3V
— Crypto Banter (@crypto_banter) September 9, 2026
Under the plan, the new rate would cover digital assets bought after January 1, 2027. Assets purchased before that date may still fall under the current rules, though that has not been confirmed yet.
How Germany Taxes Crypto Now
Right now, Germany treats crypto as a private asset. If you sell Bitcoin or Ether after holding it for more than 12 months, you pay zero tax on the profit.
For sales within that 12-month window, gains are taxed at the investor’s personal income tax rate, which can reach as high as 45%.
The new 25% flat rate would remove the one-year holding benefit for newly acquired assets. For some short-term holders, it would actually lower their tax burden.
The proposal would bring crypto under Germany’s existing capital income tax system, known as the Abgeltungsteuer. This is the same framework that applies to gains from stocks and other securities.
A personal allowance is expected to remain. Germany currently offers a €1,000 exemption threshold for private disposal gains.
What the Government Expects to Raise
Finance Minister Lars Klingbeil first signaled plans to change how crypto is taxed in April, linking it to a broader package aimed at raising €2 billion in new revenue while targeting tax fraud.
The crypto measure alone is expected to bring in around €350 million, according to Der Spiegel.
Klingbeil confirmed in July that officials were preparing a concrete bill but did not reveal details while government coordination was still ongoing.
The draft has now been circulated to other federal ministries for review. It must pass through the cabinet and Germany’s full parliamentary process before becoming law.
This is not the first attempt to remove the long-term exemption. Germany’s Finance Committee rejected a similar Green Party proposal in May. The AfD has consistently backed keeping the 12-month rule and won nearly 44% of the vote in Saxony-Anhalt this week.
Crypto oversight in Germany has been expanding on other fronts too. Since January, the country has enforced EU rules requiring crypto service providers to share customer transaction data with tax authorities.
Germany is also the EU’s leading jurisdiction for Markets in Crypto-Assets authorizations, with 79 approved providers as of August, ahead of France with 35 and the Netherlands with 29.
Chainalysis estimated Germany saw $24.1 billion in potentially taxable on-chain crypto activity during 2025.
