- Germany is preparing to tax gains on crypto acquired after Dec. 31, 2026, regardless of how long investors hold the assets.
- Existing holdings would keep the current tax treatment, which can allow tax-free sales after a 12-month holding period.
- The Finance Ministry expects the changes to raise about €160 million in 2028 and roughly €350 million a year by 2031.
Germany is getting ready to abolish a tax exemption that currently allows individual investors to sell bitcoin (BTC) and other digital assets completely tax-free if they hold them for longer than 12 months.
A legislative draft from the Federal Ministry of Finance, spearheaded by Vice Chancellor Lars Klingbeil, proposes that profits generated from digital assets purchased after December 31, 2026, will become taxable regardless of how long they are kept, based on a DTS report referencing the German publication Die Welt.
Any digital currency purchased prior to that deadline will continue to be governed by the existing framework. Furthermore, the initiative intends to categorize earnings derived from crypto staking and lending as investment income.
This shift will place assets like bitcoin and ether (ETH) into a regulatory tax framework that evaluates profits similarly to traditional financial investments. Specifically, this falls under Germany’s flat withholding tax framework, known as Abgeltungsteuer, which levies a 25% tax plus a 5.5% solidarity surcharge on that tax, resulting in an effective rate of 26.375% excluding any applicable church taxes.
On the other hand, non-fungible tokens, certain stablecoins, security tokens, and select real-world asset tokens will stay outside the scope of this new tax structure, the publication notes.
Meanwhile, short-term speculators might actually gain advantages from this policy, as their profits are presently taxed at regular personal income tax brackets, which reach a maximum of 45% for top earners.
The legislation is scheduled to go into effect in January 2027, while crypto platforms will be mandated to begin automated tax withholding starting in 2028, granting service providers an extra year to upgrade their infrastructure.
Exchanges and custodians will be allowed to utilize acquisition costs and purchase dates provided by users whenever tokens are transferred across different networks. Should traders fail to supply this documentation, they will be subjected to a standard 25% flat tax rate.
The Ministry of Finance projects that this policy will bring in approximately 160 million euros ($186 million) in supplementary tax income by 2028. That total is anticipated to climb to around 350 million euros annually by 2031.
Originally published at https://www.coindesk.com/business/2026/09/09/germany-moves-to-tax-bitcoin-like-stocks-as-new-draft-bill-targets-tax-free-gains.
