Key Highlights
- Germany’s Finance Ministry has proposed ending the current tax-free treatment of crypto gains after a 12-month holding period for newly acquired assets.
- Bitcoin and other cryptocurrencies acquired on or before December 31, 2026, would remain subject to the existing tax framework.
- The proposed rules would take effect on January 1, 2027, while automatic tax withholding by crypto service providers would begin in January 2028.
Germany’s Federal Ministry of Finance has prepared a draft bill that would end the current tax-free treatment of cryptocurrency gains held for more than one year for newly acquired assets. The new rules would apply only to crypto assets acquired or received after December 31, 2026.
According to a local report published on September 8, Bitcoin and other cryptocurrencies purchased on or before that date would continue under the existing framework, including the possibility of a tax-free sale after twelve months.
The law is scheduled to take effect on January 1, 2027, and automatic tax withholding by crypto service providers would begin on January 1, 2028. The additional year is intended to allow platforms time to put the required technical systems in place.
Crypto Gains and Proposed Tax Changes
The proposal would make gains from the sale of Bitcoin, Ether, and other exchange-traded cryptocurrencies taxable regardless of holding period.
Under existing rules, gains from private sales of cryptocurrencies are generally tax-free after a holding period of twelve months. The draft would reclassify such gains, along with income from lending and staking, as capital income subject to the flat withholding tax that already applies to stocks and fund units. The Finance Ministry argues that the change would remove cryptocurrencies’ special tax treatment relative to traditional capital investments.
The proposal remains in the early stages of coordination within the federal government. Changes during the legislative process remain possible.
According to estimates from the Finance Ministry, the reform would generate additional tax revenue of around €160 million in 2028, according to the report. By 2031 the annual figure is projected to reach approximately €350 million. Of that amount, the federal government would receive about €75 million initially and roughly €160 million in later years.
Bitcoin and Ether Targeted by Proposed Rules
The Finance Ministry states that cryptocurrencies are increasingly used as private investments. Their high liquidity and predominantly speculative character, the draft notes, make them more comparable to traditional capital investments than to other economic assets. The rules are directed particularly at Bitcoin and Ether.
Exceptions listed in the draft include non-fungible tokens, certain stablecoins, security tokens, and other crypto assets linked to real-world assets.
Crypto service providers would generally be required to withhold the tax at source. Because purchases and sales often occur across different platforms, the draft allows providers to rely on acquisition costs and purchase dates supplied by investors. Where that information cannot be established, flat-rate taxation rules would apply.
Banking sector expands retail access
Separately, Germany’s cooperative and savings banks have been expanding retail access to crypto trading in 2026. Some of the country’s nearly 650 cooperative banks already provide access to Bitcoin, Ethereum, Litecoin, and Cardano through a platform developed by DZ Bank. Customers can trade these assets within their existing banking interfaces.
DekaBank is developing a separate crypto trading platform for Germany’s approximately 340 savings banks. The product is expected to become available later this year and to be introduced in phases across participating institutions. The development allows customers to buy and sell digital assets through their established bank accounts rather than solely through specialized crypto exchanges.
Also Read: Hyperliquid’s Policy Arm Hires Former Solicitor General to Fight CME’s CFTC Suit
