Germany to Implement 25% Tax on Crypto Gains Starting in 2027

Germany's Finance Ministry has announced a proposal to impose a flat 25% tax on cryptocurrency gains beginning in 2027. This change will conclude the existing rule that allows investors to sell crypto tax-free after holding it for more than a year.

The draft legislation aims to align cryptocurrencies such as Bitcoin and Ether with traditional financial assets, including stocks. Under the new regime, the distinction of a holding period will be eliminated, and a solidarity surcharge will be added to the withholding tax. However, investors will still be able to utilize the current €1,000 savings allowance, and gains and losses from crypto can be offset for tax purposes.

The Finance Ministry anticipates that this reform will generate approximately €160 million in additional revenue in 2028, with projections rising to €350 million annually by 2030. The new tax regulations will apply to crypto assets acquired from January 1, 2027, while those purchased prior will remain under the existing tax rules. The legislation is currently in the early stages of government coordination and may undergo changes before final approval. Automatic withholding by trading platforms is expected to commence in 2028.