Germany Abolishes Tax-Free Crypto Gains with 25% Flat Tax
Germany is moving to abolish its tax exemption for crypto gains after more than one year. The government's preferred model would treat cryptocurrency as investment income, subjecting gains to a flat 25% tax plus Germany's solidarity surcharge.
The change aims to eliminate one of Europe's most attractive tax benefits for long-term crypto investors. Currently, private investors in Germany pay no tax when they sell crypto assets after holding them for over a year. However, the government is working toward ending this distinction.
An investor who buys €100,000 worth of Bitcoin and realizes a €100,000 profit after holding it for more than one year would owe no income tax on that gain under current rules. In contrast, under the new proposal, the same gain could generate approximately €26,375 in tax and solidarity surcharge.
The government's plan is still under development and has not yet become law. The existing one-year exemption remains in place while the government develops its own approach.