Germany Prepares to Remove Tax-Free Sale Advantage in Crypto: End of 2026
Germany is preparing to eliminate the one-year holding period advantage for Bitcoin and other cryptocurrencies purchased after December 31, 2026.
A draft law prepared by the German Federal Ministry of Finance envisages that gains from crypto assets acquired after this date will be taxed regardless of the holding period. According to a report by DTS citing Die Welt, the regulation will bring crypto gains closer to the tax system applied to traditional investment returns.
Under current rules, private investors in Germany can avoid paying capital gains tax when they sell Bitcoin (BTC) and other cryptocurrencies after holding them for more than one year. If the draft comes into effect, this advantage will only be preserved for assets purchased before December 31, 2026.
Effective rate for crypto gains in the draft is 26.375 percent
In the new system, a 25 percent tax rate is planned for Bitcoin and Ether (ETH) gains. With the 5.5 percent solidarity surcharge applied on this amount, the effective tax rate will rise to 26.375 percent, excluding church tax.
Staking and crypto lending income will also be included in the scope of capital income. NFTs, some stablecoins, security tokens, and certain tokens tied to real-world assets will be excluded from the scope of the draft.
The regulation is planned to come into force in January 2027, with crypto service providers expected to start automatic tax withholding in 2028. Platforms will be granted a one-year transition period to update their systems.
When assets are moved to another platform, providers will be able to use the purchase price and acquisition date reported by customers. If these records cannot be provided, investors may face a 25 percent flat tax. For short-term traders who are currently subject to personal income tax rates, the new rate may be lower; in the current system, the highest rate reaches 45 percent.
The Ministry of Finance expects the regulation to generate approximately 160 million euros in 2028 and approximately 350 million euros annually by 2031. These figures represent the projected revenues if the draft comes into effect.