Germany is moving ahead with a plan that would change how private investors pay tax on bitcoin and other crypto. A draft bill from the Federal Ministry of Finance, led by Vice Chancellor Lars Klingbeil, would end the current one-year holding rule for assets acquired after Dec. 31, 2026. Under today’s rules, private investors can sell crypto tax-free if they held it for more than a year. The new proposal would remove that option for future purchases, according to a report from Die Welt cited by DTS.
What the draft proposes
The bill would place crypto gains under Germany’s flat withholding tax system, known as Abgeltungsteuer. That means a 25% tax plus a 5.5% solidarity surcharge, for an effective rate of 26.375%. Church tax could still apply on top. Crypto bought before Jan. 1, 2027, would stay under the old rules, so existing holdings are not fully affected. The proposal would also treat income from crypto lending and staking as capital income, which could matter for people who earn yield on their coins.
Who wins and who waits
Short-term traders might come out ahead. At the moment, gains on crypto sold within a year are taxed at the investor’s personal income rate, which can reach 45% for top earners. A flat 26.375% rate could be lower for some active traders. Long-term holders, however, would lose the tax-free exit they have used for years. The draft also leaves several asset types outside the new regime, including NFTs, some stablecoins, security tokens, and some tokens tied to real-world assets. That split may create confusion about which tokens fall where. I think the details will matter as much as the headline rate.
Revenue and implementation
The law would take effect in January 2027. Crypto providers would need to start withholding taxes automatically in 2028, giving platforms an extra year to update their systems. Providers could use purchase prices and acquisition dates supplied by customers when assets move between platforms. If investors cannot provide those records, they would face a 25% flat tax. The Finance Ministry expects the measure to raise about 160 million euros, or $186 million, in extra tax revenue in 2028. That figure could rise to around 350 million euros a year by 2031. The plan still needs to pass through Germany’s legislative process, so the final rules could change. For now, the direction is clear: Germany wants crypto gains to look more like stock market returns for tax purposes.
