Germany's Finance Ministry drafted a bill applying a flat 25% tax on crypto gains from assets acquired after Jan. 1, 2027, with automatic platform withholding to begin in 2028.
Germany's Federal Ministry of Finance has drafted legislation that would end the country's current tax exemption on cryptocurrency gains for assets held for at least one year. Under the proposal, profits from crypto sales would instead be taxed at a flat 25% rate. The rules would apply only to assets acquired on or after Jan. 1, 2027.
German news outlet Welt first reported the draft on Sept. 9 based on a departmental document dated mid-August 2026, and Handelsblatt separately confirmed the proposal. Vice Chancellor and Finance Minister Lars Klingbeil authored the bill.
How the New Rules Would Work
Under current German law, profits from cryptocurrency sales become entirely tax-free once an asset has been held for at least 12 months. The Finance Ministry set that position in 2022 and later extended it to cover coins used for staking and lending. Selling within the 12-month window currently triggers ordinary income tax, which can reach 42% for higher earners.
The draft would abolish that exemption for assets bought after Jan. 1, 2027. Gains on those assets would be classified as capital income, the same category used for dividends, share profits, and interest. The flat 25% rate would include a solidarity surcharge of 5.5% of the tax owed, bringing the effective rate to approximately 26.375% before church tax.
Germany's existing €1,000 ($1,164) saver's allowance would still apply under the proposed rules. Losses could be offset against gains, including those on shares. Income from lending and staking would also fall under the capital income classification. NFTs, security tokens, certain stablecoins, and some real-world-asset tokens would remain outside the proposed regime.
The ministry argued in the draft that crypto assets now function as mainstream private capital investment. It said the current system is unfair because hard-earned income and capital gains are taxed while crypto speculation profits largely are not. Critics have noted that removing the holding-period exemption affects long-term holders more than the short-term traders the argument describes.
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Platform Withholding Delayed Until 2028
Automatic tax withholding by banks and platforms would not begin until 2028, giving providers one year after the rules take effect to build the required systems. Providers would be permitted to rely on purchase prices and acquisition dates supplied by customers when assets transfer between platforms. Where that data is unavailable, the flat rate would apply by default regardless of the actual holding period.
The ministry projected the change would produce €160 million (approximately $176 million) in revenue during 2028. That figure is expected to rise to €350 million (approximately $385 million) annually by 2031. Klingbeil said separately in April 2026 that Germany expects up to €2 billion (approximately $2.3 billion) in total additional revenue from crypto taxation, though that figure does not appear in the August draft text. The bill remains in early coordination within the federal government and could be revised before it is finalized. The Union and SPD governing coalition agreed during summer 2026 budget negotiations to move ahead with crypto taxation, giving the proposal political backing at the coalition level.
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