Germany’s crypto tax rules could soon make a familiar Bitcoin strategy much less attractive: buy, wait a year, and sell without paying tax on the gain.
A draft bill from the German Federal Ministry of Finance would end that exemption for Bitcoin and other cryptocurrencies purchased after December 31, 2026, according to a DTS report citing German newspaper Die Welt.
Under the proposal, gains on newly acquired crypto would be taxable regardless of how long an investor holds the asset. Existing holdings would keep the current treatment, meaning the rules would draw a clear line between crypto already in investors’ portfolios and coins bought after the 2026 cutoff.
The proposal would also bring crypto gains closer to the way Germany taxes traditional investment returns. Bitcoin and Ether would fall under the country’s flat withholding tax system, known as Abgeltungsteuer.
That rate is 25%, plus a 5.5% solidarity surcharge on the tax, producing an effective rate of 26.375% before any church tax is applied.
Germany crypto tax rules could make long-term holding less rewarding
For investors accustomed to Germany’s current system, the shift could be significant. Under existing rules, private investors can generally sell crypto tax-free after holding it for more than 12 months.
The proposed system removes that holding-period advantage for crypto purchased from January 1, 2027 onward. Income generated through staking and crypto lending would also be treated as capital income under the draft.
Not every digital asset would be swept into the same framework. NFTs, some stablecoins, security tokens and certain tokens connected to real-world assets would reportedly remain outside the proposed regime.
There is also an unusual twist for short-term traders. Today, their crypto gains can be taxed at their personal income tax rate, which can reach 45% for the highest earners. A flat rate of 26.375% could therefore represent a lower tax bill for some active investors.
The transition would happen in stages. The new rules are proposed to take effect in January 2027, while crypto service providers would not have to begin automatically withholding the tax until 2028.
That extra year is intended to give exchanges and other providers time to adapt their systems. Platforms could also rely on purchase prices and acquisition dates supplied by customers when crypto is transferred between services.
Record-keeping could become especially important. Investors who cannot provide documentation for their acquisition price and date could face a 25% flat tax, according to the report.
For Berlin, the calculation is ultimately a straightforward one: the measure is expected to generate about €160 million ($186 million) in additional tax revenue in 2028.
That figure could climb to roughly €350 million annually by 2031.
The proposal still represents a significant change in how Germany treats cryptocurrency as an investment. For anyone building a portfolio around long holding periods, the old one-year tax rule could soon become a historical footnote rather than a planning strategy.