Germany is considering major changes to its cryptocurrency tax framework beginning in 2027, placing the country’s popular tax-free holding benefit for Bitcoin and other digital assets under fresh scrutiny.
Summary
Germany may remove the one-year tax exemption currently available for long-term crypto holdings starting in 2027.
Finance Minister Lars Klingbeil linked the proposal to plans aimed at raising an additional €2 billion in tax revenue.
Industry groups fear the move could weaken Germany’s reputation as one of Europe’s most crypto-friendly jurisdictions.
During the presentation of Germany’s 2027 federal budget on April 29, Finance Minister Lars Klingbeil stated that the government intends to “tax cryptocurrencies differently” as part of broader measures designed to strengthen enforcement against financial crime while generating approximately €2 billion, or roughly $2.3 billion, in additional tax revenue.
Under Germany’s current tax framework, profits from private crypto sales are taxable only if the assets are sold within one year of purchase. Investors who hold Bitcoin or other cryptocurrencies for more than 12 months are generally exempt from capital gains tax, making Germany one of the most attractive jurisdictions in Europe for long-term crypto investors.
Guidance issued by Germany’s finance ministry in 2022 and reaffirmed again in 2025 also extended the same one-year “Haltefrist” exemption to cryptocurrencies used in staking and lending activities. Officials had previously considered imposing a 10-year taxable holding period for such assets before ultimately abandoning the proposal.
Although Lars Klingbeil did not specifically mention the one-year exemption during his budget speech, several industry organizations, including the German Bitcoin Association, believe the holding rule is the most likely target if Berlin hopes to significantly increase crypto-related tax revenue.
Germany’s crypto sector faces uncertainty
Robin Thatcher, a cryptocurrency tax accountant quoted by Cointelegraph, warned that removing the tax-free holding period could significantly reduce Germany’s attractiveness as a crypto hub. According to Thatcher, other countries should be adopting Germany’s current model rather than moving away from it.
The debate arrives as Germany expands crypto oversight under the European Union’s DAC8 reporting framework. Since January, the country has enforced the EU’s Crypto Asset Tax Transparency Act, requiring crypto service providers to share detailed customer transaction records with the Federal Central Tax Office and other EU regulators.
The system has already reduced opportunities for undeclared crypto trading across Europe.
Observers have also drawn comparisons to Austria, which abolished its own crypto tax-free holding period in 2022 and replaced it with a flat capital gains tax regardless of how long assets are held.
Bitpanda co-founder Eric Demuth criticized Austria’s approach earlier this year, arguing that the change created minimal additional benefit for the government while increasing bureaucracy and operational burdens for investors and crypto companies. He also warned Germany against following the same path.
According to Thatcher, if the exemption disappears, Germany could eventually adopt a structure similar to Austria’s 27.5% flat crypto tax model. Such a shift would also bring Germany closer to the United Kingdom’s 24% top capital gains tax rate, potentially removing one of Germany’s biggest competitive advantages for digital asset investors and startups.
Despite growing uncertainty around taxation, German financial institutions continue expanding into regulated digital asset services. In January, DZ Bank, Germany’s second-largest bank, received approval from BaFin to launch its “meinKrypto” trading platform under the EU’s Markets in Crypto-Assets Regulation framework.
The expansion followed similar crypto initiatives launched by DekaBank and LBBW during 2024, both of which introduced institutional digital asset services through regulated custody and trading partnerships.
