Germany proposes to end tax‑free crypto gains after 2026
Germany to tax crypto gains like stocks
The German finance ministry has drafted a bill that would tax profits from cryptocurrencies such as Bitcoin and Ethereum in the same way as stock earnings. The change would start for assets bought after 31 December 2026 and would apply regardless of how long the investor holds the asset.
Key points
- Current tax‑free rule for crypto held over 12 months would end for purchases after 31 Dec 2026.
- Existing holdings keep the old rule and can still be sold tax‑free after a year.
- Crypto lending and staking income would be treated as capital income.
- The flat withholding tax (Abgeltungsteuer) is 25 % plus a 5.5 % solidarity surcharge, totalling about 26.4 % before any church tax.
- Revenue is expected to reach €160 million in 2028 and about €350 million per year by 2031.
Bill details
The draft, prepared by the Federal Ministry of Finance and led by Vice Chancellor Lars Klingbeil, states that gains on crypto bought after the end of 2026 will be taxable from the moment of sale. The law is planned to take effect in January 2027, and crypto platforms must begin withholding the tax automatically in 2028.
What is confirmed
- The tax change applies only to crypto acquired after 31 Dec 2026.
- Assets bought before that date remain under the current 12‑month tax‑free rule.
- Staking and lending earnings will be taxed as capital income.
- Some NFTs, certain stablecoins, security tokens and tokens linked to real‑world assets are excluded from the new regime.
- Platforms can use purchase price and acquisition date information supplied by users; if unavailable, a 25 % flat tax will be applied.
Why it matters
The shift aligns cryptocurrency taxation with the existing flat tax on stock profits, simplifying reporting for investors and potentially increasing government revenue. Short‑term traders, who now face personal income tax rates up to 45 %, may see a lower effective tax rate under the flat system.
Next steps
The bill is expected to be debated in the German parliament later this year. If passed, the new rules will start in January 2027, and crypto service providers will have until the start of 2028 to update their systems for automatic tax withholding.
