Germany Cracks Down on Crypto Tax Evasion

Germany is updating its tax regulations to include cryptocurrencies like Bitcoin and Ethereum. According to a draft from the German Ministry of Finance, gains from selling these assets will be subject to a flat tax of 25 percent, similar to stocks and other capital investments.

The current system exempts individual investors from paying taxes on cryptocurrency gains made after holding them for more than a year. However, this exemption is set to end under the new regulations. The change is planned to apply to cryptocurrencies acquired from January 1, 2027, onwards.

The draft also proposes preserving some benefits for investors, including an annual tax exemption limit of €1,000 ($1,170) and allowing crypto investment gains and losses to be offset against other securities like stocks.