Germany Crypto Tax Plan: 25% Levy Ends One-Year Exemption

Short answer: On September 10, 2026, reports detailed that Germany's Federal Ministry of Finance has drafted a 25% flat tax on crypto gains that would end the one-year tax-free holding period for coins bought from January 1, 2027. Holdings acquired before that date would keep the current treatment, and exchanges could start withholding the tax automatically from 2028. The plan is a draft, not law, and still needs cabinet and parliamentary approval.

What happened

The German crypto tax plan was first reported by the newspaper Die Welt, with further details from Handelsblatt, and was picked up across the crypto press on September 10. The draft comes from the Federal Ministry of Finance (Bundesfinanzministerium) led by Finance Minister Lars Klingbeil of the Social Democratic Party (SPD), part of Chancellor Friedrich Merz's coalition government.

• Rate: a flat 25% on crypto capital gains, the same rate Germany already applies to share dividends and interest under its withholding tax on investment income (Abgeltungsteuer).
• Surcharges: the 5.5% solidarity surcharge applies on top of the tax, lifting the effective rate to about 26.375% before any church tax.
• Scope: assets purchased from January 1, 2027. Coins bought earlier would reportedly stay under today's rules.
• Collection: crypto service providers could withhold the tax at source from January 1, 2028.
• Revenue: the ministry reportedly expects about €160 million in 2028, rising to roughly €350 million a year by around 2030–2031.

Officials justify the change by saying it is unfair that speculative crypto profits escape tax while gains on shares and funds do not.

How German crypto tax works today and what would change

Germany currently treats bitcoin and other cryptocurrencies held by individuals as private assets rather than capital investments. Under the private-sales rule, a gain is tax-free once the coin has been held for more than one year. Sell sooner, and the profit is taxed at your personal income tax rate, which can reach 45% for top earners, with a €1,000 annual exemption threshold for such gains.

A simple example shows the scale. A €100,000 profit on bitcoin held for more than a year is tax-free today. Under the draft, the same gain on coins bought in 2027 or later would cost about €26,375 in tax and surcharge. For active traders the picture is the reverse: someone who now pays 42% or 45% on short-term profits could pay less.

Why Germany's one-year exemption mattered

The holding-period exemption has made Germany one of the most favourable large economies in Europe for long-term crypto holders. It rewarded buy-and-hold behaviour, and it is one reason German banks and brokers have been expanding retail crypto trading. Ending it would bring crypto in line with shares, which lost a similar exemption in 2009 when the flat withholding tax was introduced.

The plan also fits a broader European trend toward tighter tax reporting. Under the EU's DAC8 directive, crypto service providers must report customer transactions to tax authorities from 2026, which makes automatic withholding much easier to run.

What happens next

1. Government coordination. The draft is still being coordinated within the federal government; the final legal text has not been published.
2. Cabinet decision. The coalition has to agree on it before it goes to parliament.
3. Bundestag vote. Resistance is expected. The far-right Alternative for Germany (AfD) opposes the measure, and in May 2026 lawmakers rejected an earlier Green Party proposal to scrap the exemption.

Details such as loss offsetting, allowances and how staking income would be treated may still change.

What it means for you

If you are a German tax resident, nothing changes today. Coins bought before January 1, 2027 would, under the draft, keep the one-year exemption. That makes record-keeping more important than ever: you may need to prove the purchase date of each coin, so keep exchange statements, wallet addresses and swap receipts together.

• Do not rush into trades just to beat a deadline that is not yet law.
• Track the cost basis and date of every buy, including swaps between coins, which already count as disposals in Germany.
• If you use a non-custodial wallet or an instant exchange service, keep your own transaction history; see our guide to crypto tax basics.

Readers outside Germany should watch the plan anyway: large EU economies often copy each other's tax approach.

Key takeaways

• Germany's Finance Ministry has drafted a 25% flat tax on crypto gains, about 26.4% with the solidarity surcharge.
• The one-year tax-free holding period would end for coins bought from January 1, 2027.
• Earlier holdings would reportedly keep the current rules.
• Providers could withhold the tax from 2028; expected revenue is about €160 million in 2028.
• The draft still needs cabinet and Bundestag approval and may change.

When you do convert, write down the exact amount received and the date. The exchange calculator shows the amount you will get before an order is created, which makes that record easy to keep.

Sources: Cryptopolitan, CCN via Yahoo Finance, CoinGape, KuCoin News