Germany Plans to Tax Cryptocurrency Gains at 25% Starting in 2027
12.09.2026 19:03
The German Ministry of Finance has drafted a proposal to reform the taxation of crypto assets, which calls for the introduction of a 25% tax rate on gains from the sale of Bitcoin, Ethereum, and other cryptocurrencies, regardless of the length of time the asset is held.
The corresponding draft bill is in the early stages of approval within the federal government, Handelsblatt reported on September 9, citing a document obtained by the publication. Germany currently remains one of the most attractive major European jurisdictions for long-term private investors in cryptocurrencies. Under current rules, gains from the sale of crypto assets held for more than one year are generally not subject to income tax. If an asset is sold within 12 months of purchase, the profit is classified as a private sale of property and taxed at the taxpayer’s individual rate. This procedure was confirmed by official clarifications from the German Ministry of Finance dated March 6, 2025.
The new model is set to fundamentally change this approach. It is proposed that crypto assets be reclassified from the category of private property transactions to the category of capital gains and taxed similarly to profits from stock transactions. The base rate of the Abgeltungsteuer will be 25%. Taking into account the solidarity surcharge, the effective tax rate could reach 26.375%, excluding any potential church tax.
The proposed rules would apply only to cryptocurrency acquired after December 31, 2026. For Bitcoin, Ethereum, and other assets purchased prior to that date, the current tax regime is expected to remain in place.
The bill calls for the new rules to take effect on January 1, 2027. However, automatic tax withholding by German cryptocurrency service providers is planned to be introduced only as of January 1, 2028, to give platforms time to restructure their accounting systems.
The Ministry of Finance estimates that the rule change will generate approximately EUR 160 million in additional tax revenue for the budget in 2028. In subsequent years, the amount is expected to increase and, according to the ministry’s estimates, reach approximately EUR 350 million in 2030.
The reform will effectively eliminate the main tax advantage of long-term cryptocurrency holdings in Germany. It will no longer be sufficient for an investor to hold Bitcoin or Ethereum for more than a year to fully exempt the profit from the sale from taxation.
However, a final decision has not yet been made. The Ministry of Finance’s draft is in the early stages of interagency review, after which the document must undergo further consideration by the government, the Bundestag, and the Bundesrat.
Separately, Germany is already strengthening tax transparency for transactions involving digital assets. In November 2025, the Bundestag approved the implementation of the European DAC8 Directive, which requires crypto service providers to report information on certain customer transactions to tax authorities.