EU Crypto Tax Advances Amid US and German Developments
Germany is considering a flat 25% tax rate on digital asset gains, which would bring crypto in line with stocks and other financial investments. The proposal, from Finance Minister Lars Klingbeil, aims to generate €160 million ($186 million) in tax revenue by 2028 and up to €350 million ($407 million) by 2030.
The current system treats privately held digital assets as 'other assets' for tax purposes, with gains taxable if sold within a year. However, the proposed reform would bring qualifying digital assets into Germany's capital-income tax regime, ending the tax-free treatment after one year and subjecting gains to an effective rate of 26.375%. Lending and staking income would also be treated as capital income.
The German government has reportedly excluded certain tokens from the new rules, including non-fungible tokens (NFTs), security tokens, stablecoins, and real-world-asset (RWA) tokens, depending on their characteristics. Finance Minister Klingbeil argued that it is unfair when hard-earned income and capital gains are taxed, but profits from speculation in crypto assets remain largely tax-free.
Meanwhile, Bulgaria has passed legislation aligning the country with EU reporting rules, requiring crypto-asset service providers to register and provide information on digital asset users and transactions. The move aims to combat tax evasion and avoidance by strengthening international administrative cooperation.