Germany drafts flat 25% crypto gains tax starting 2027
Regulation & Gov ·
A finance ministry proposal would end Germany's tax-free treatment of long-held crypto for assets purchased from 2027 onward, while leaving existing holdings under current rules.
Germany's Vice Chancellor and Finance Minister Lars Klingbeil has circulated draft legislation that would tax crypto asset sales at a flat 25% rate, according to a document reported by Decrypt that was reportedly seen by Handelsblatt. The rule would take effect January 1, 2027, and would apply strictly to crypto acquired on or after that date, meaning coins bought earlier would remain subject to the existing framework.
Under present German policy, established in 2022 and later extended to staking and lending income, crypto held for twelve months incurs no tax on gains; assets sold within that window are taxed as ordinary income, reaching up to 42% for higher earners. The draft would remove the holding-period distinction entirely for post-2027 purchases, taxing gains at the flat 25% rate plus a 5.5% solidarity surcharge on that tax, producing an effective rate near 26.375% before any church tax. The €1,000 saver's allowance would still apply, and losses could offset gains, including those from share sales. Staking and lending income would also be classified as capital income under the proposal, while NFTs, security tokens, and certain stablecoins and real-world-asset tokens would remain outside its scope.
Automatic withholding by banks and platforms would not begin until 2028, giving providers a year to build reporting systems. Platforms could use purchase prices and acquisition dates supplied by customers moving assets between services; absent that data, the flat rate would apply by default.
The ministry has framed the change as correcting an inconsistency in how crypto is treated relative to other capital income such as dividends or interest, arguing crypto increasingly functions as a private investment rather than a good comparable to classic cars or artwork. Multiple reports covering the draft describe the same core mechanics — a 25% flat rate, a 2027 start date, and preservation of the exemption for pre-2027 holdings — indicating broad agreement on the proposal's basic contours across outlets.
Projected revenue is described as modest, an estimated €160 million in 2028 rising to €350 million annually by 2031. The bill remains in early coordination within the federal government and could still change, though the Union and SPD reportedly agreed during summer budget talks to move ahead with taxing crypto assets. Whether the holding-period removal survives further negotiation, and how withholding will be enforced for cross-platform transfers, remain open questions.