German Finance Minister Lars Klingbeil and the ruling coalition plan to abolish the one-year holding period for cryptocurrency gains.
This move would eliminate a significant tax advantage for digital asset investors, potentially altering the attractiveness of Germany as a hub for blockchain innovation and wealth management.
The proposal is currently being discussed as part of the budget draft for 2027 [3]. Under current rules, cryptocurrency gains are tax-free if the assets are held for one year [2]. The coalition seeks to end what they describe as an unfair tax privilege to generate additional revenue for the federal budget.
According to coalition estimates, the new taxation framework is expected to bring in approximately 2 billion euros [1]. While some reports suggest the plan involves a complete removal of the holding period, other accounts indicate the government may instead focus on increasing the tax rate.
"We want to end the tax privileges for Bitcoin and get more from the profits of investors," Klingbeil said.
The proposal has met with resistance from industry leaders. Eric Demuth, co-founder of Bitpanda, criticized the move as a blow to the country's technological edge.
"An extremely stupid decision — this will strongly brake the innovative power of the crypto market in Germany," Demuth said.
The government intends to finalize the decision during the 2024-2025 legislative cycle to ensure the measures are in place for the 2027 budget year.
“"We want to end the tax privileges for Bitcoin and get more from the profits of investors,"”
The proposal represents a shift in Germany's approach to digital assets, moving from a permissive environment that encouraged long-term holding to a more traditional capital gains model. By targeting the one-year holding period, the government is prioritizing immediate fiscal revenue over the growth of the domestic crypto-investment sector, which may lead to capital flight toward jurisdictions with more favorable tax laws.
