Germany Abandons 12-Month Tax-Free Rule for Cryptocurrency Gains

Germany's Federal Ministry of Finance is planning to tax cryptocurrency gains at a flat rate of 25%, plus solidarity surcharge, for assets acquired from January 1, 2027. This move would end the current tax-free treatment tied to holding crypto for more than 12 months for newly acquired assets.

The proposed legislation would apply a flat-rate approach to post-cutoff acquisitions, alongside the solidarity surcharge. This means that gains on crypto acquired after December 31, 2026 would be taxed regardless of how long the assets are held.

However, pre-2027 holdings would retain the existing treatment, including the possibility of a tax-free sale after a holding period exceeding 12 months. The Finance Ministry's draft follows earlier public signals from Berlin, which indicated that the government intended to tax Bitcoin and other crypto gains more heavily and remove the existing holding period.