German Crypto Investors Rally Against Proposed Tax Changes

A petition to preserve the one-year holding period for cryptocurrencies in Germany has gathered over 38,000 signatures since its launch on August 4, 2026. The petition, which aims to keep the current tax treatment of crypto assets under Section 23 of the Income Tax Act (EStG), is a response to a decision by the federal cabinet to assign crypto assets held as private wealth to income from capital assets. This move would abolish the tax exemption after twelve months of holding and subject sales to withholding tax.

The current rule, which has been in place since 2023, allows gains from cryptocurrency sales to be tax-free if they are held for more than a year. However, this exemption is set to disappear under the proposed new rules, which would apply a withholding tax of around 26-28% on crypto gains.

The petitioners argue that the classification of crypto assets as 'other assets' should be retained and that the one-year holding period should remain in place. They cite legal certainty, protection of legitimate expectations, and private wealth formation as their grounds for opposing the cabinet's decision.