German Crypto Tax Ends the One-Year Exemption

Berlin’s Federal Finance Ministry is drafting a bill that scraps the exemption granted after twelve months of holding. The German crypto tax would move to a flat 25% levy, or 26.375% once the solidarity surcharge is added. Only coins bought from 1 January 2027 fall under the new rules, with everything acquired before that date keeping the current treatment.

Key Takeaways

• The German crypto tax becomes a flat 25% levy, 26.375% with the solidarity surcharge, on coins bought from 1 January 2027.
• Holdings acquired before that date stay exempt after twelve months under a grandfathering clause.
• Berlin expects €160 million of extra revenue in 2028 and roughly €350 million by 2030.

What the German Crypto Tax Bill Actually Rewrites

Germany currently treats coins held by a private individual as “other economic assets”. Sell inside twelve months and the gain runs through the progressive income tax schedule, which tops out at 45%. Hold past the twelve-month mark and the gain walks out untaxed, with no ceiling on the amount.

The draft closes that exit. Coins would fall under the Abgeltungsteuer, the flat levy already applied to dividends and equity gains, at 25%. Once the solidarity surcharge is layered on, the effective rate is 26.375% regardless of holding period.

What disappears goes well beyond a rate: the whole duration logic that has shaped German holder behaviour for years, the one that paid investors to sit still. Tax offices across Europe now see these gains in detail, and 240 British taxpayers declared more than a million pounds each in crypto gains in a single filing year.

The €1,000 annual allowance on private disposals of this category survives in the text. On a mid-sized portfolio it covers a slice of one strong year, nothing more.

A second stage lands in 2028, when platforms start withholding automatically. Tax would then be collected at source, the way it already is on a regular securities account. The staged timetable echoes London, which pushed its new DeFi income regime back to 2027 to give venues room to build the plumbing.

Grandfathering Splits Every German Portfolio in Two

Coins bought before 1 January 2027 keep the existing treatment and can still be sold tax free after twelve months. The reform bites only on later purchases, which protects the stock already sitting in German wallets.

That clause mechanically creates two classes of coins inside one wallet. Pre-2027 lots carry their own tax identity, post-2027 lots owe 26.375% from the first euro of gain. Acquisition dates become the core of every German crypto tax file.

For anyone buying on a schedule, the bookkeeping gets messy fast. Every entry made up to 31 December 2026 sits in the old regime, every entry after it sits in the new one, and the ordering method applied at sale decides what is actually owed. The draft says nothing yet about how those lots are matched.

Splitting a holder base by acquisition date is not a German invention. In Asia, South Korea set a 22% rate on crypto gains from 2027 after several postponements, and legacy holdings were handled separately there too.

The revenue projections show what Berlin is really chasing. The ministry models €160 million in 2028, the first year of withholding, rising to around €350 million by 2030. Set against the federal budget, those numbers are small, which puts the weight of this reform on the signal rather than the receipts.

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Europe Keeps Closing Its Last Soft Regimes

Germany was the outlier inside the bloc with its one-year exemption. A flat German crypto tax at 25% moves the country closer to Italy, which taxes crypto gains at 33%, and drops it into the upper half of European regimes. Portugal and the Czech Republic still run friendlier frameworks.

Taxation is the last floor of a European build that has gone up one stage at a time. The venue layer is already live and already enforced, as Austria’s first MiCA fine against Bitpanda made clear. Providers first, taxpayers next.

Nothing is settled in law. The text is still moving between ministries and has to clear cabinet, the Bundestag and possibly the Bundesrat before it takes effect, which leaves a little over three months before the switch date.

The near-term call for a German resident is blunt: pull purchases forward before 31 December 2026 to anchor those lots in the old regime, or wait for a bill that can still change. The medium-term question the market has to price is how much long-held capital stays domiciled in Germany once the German crypto tax applies to every new position.

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