For more than a decade, German crypto investors lived by one golden rule: hold bitcoin or ether for a year, then sell tax-free. Finance Minister and Vice Chancellor Lars Klingbeil now wants to close that loophole. His ministry has drafted a bill that would tax crypto gains at a flat 25% starting in 2027.
Under today's rules, selling within twelve months of purchase triggers ordinary income tax — up to 42-45% for higher earners. Hold past that mark, and the gain is entirely tax-free. That one-year exemption is what made Germany one of Europe's friendliest jurisdictions for crypto holders.
The draft folds crypto into the same flat capital-gains tax that already applies to stocks and dividends. The headline rate is 25%, plus a 5.5% solidarity surcharge, for an effective rate near 26.4%. It would only apply to coins bought from January 1, 2027 — anything acquired earlier stays under the current 12-month exemption. A €1,000 personal allowance survives, and crypto losses could offset gains from stocks and other securities.
Automatic withholding by exchanges and banks wouldn't start until 2028, mirroring how dividend tax already gets deducted at the source. The ministry says platforms need the extra year to build the reporting infrastructure. Officials project roughly €160 million in revenue during the first year, climbing to €350 million annually by 2031.
The bill is still an early draft circulating among federal ministries — it hasn't reached the cabinet or the Bundestag, so details could shift. A similar push by the Greens to scrap the one-year exemption was voted down in parliament back in May. This time the push comes from the governing coalition itself, the Union and the SPD, while the AfD opposes it. The ministry's reasoning: "It is unfair if hard-earned income and capital gains are taxed while profits from speculation remain largely tax-free."
