Germany Drafts 25% Crypto Tax for Assets Bought After 2027

Germany plans to tax cryptocurrency profits at a flat 25% rate regardless of holding period, according to a draft bill from Vice Chancellor and Finance Minister Lars Klingbeil. The proposal, reviewed by Handelsblatt and first reported by Welt, would take effect on January 1, 2027.

The new regime applies only to crypto assets acquired on or after the effective date. Holdings purchased before that time remain subject to current rules, preserving the existing tax exemption for long-term investors. Under present law, Germans pay no tax on crypto gains if they hold an asset for twelve months or more. This position, established by the ministry in 2022, also extends to coins used for staking and lending. Sales made within the twelve-month window are currently taxed as ordinary income, reaching rates of up to 42% for higher earners.

The draft bill treats crypto gains similarly to dividends, share profits, and interest. A solidarity surcharge of 5.5% of the tax amount applies, resulting in an effective rate of 26.375% before church tax. The standard €1,000 saver's allowance would remain in place, and losses could be offset against gains, including those from shareholdings. Welt reports that income from lending and staking would also be classified as capital income under the new rules. NFTs, security tokens, certain stablecoins, and some real-world-asset tokens would remain outside the regime.

Automatic withholding is not expected until 2028, allowing banks and other providers a year to build necessary systems before remitting tax directly. Providers could use purchase prices and acquisition dates supplied by customers when assets move between platforms; if such data is unavailable, the flat rate would apply. The bill argues that crypto assets have outgrown their current treatment as private capital investments, ending a special status that previously compared them to economic goods like classic cars or artworks.

The ministry stated that it is unfair for hard-earned income and capital gains to be taxed while profits from crypto speculation remain largely tax-free. Projected revenue is estimated at €160 million in 2028, rising to €350 million annually by 2031. The draft is currently in early coordination within the federal government and could change, although the Union and SPD agreed during summer budget negotiations to tax crypto.