Germany Cracks Down on Crypto Profits with 25% Flat Tax
Germany is preparing to introduce comprehensive regulations for taxing cryptocurrency gains, particularly those from Bitcoin and Ethereum. The German Ministry of Finance has drafted legislation that proposes a flat tax rate of 25 percent on cryptocurrency profits, mirroring the taxation of stocks and other capital investments.
The current system allows individual investors to exempt gains made from selling cryptocurrencies held for more than a year from taxation. However, this exemption is set to be abolished under the new regulations, which classify cryptocurrencies as capital gains.
Investors will be required to pay the 25 percent tax rate on profits from cryptocurrencies acquired after January 1, 2027. The draft also preserves some benefits for investors, including an annual tax exemption limit of €1,000 and the ability to offset crypto investment gains and losses against other securities.