Germany Cracks Down on Crypto Tax Loopholes with New 25% Levy

The German government is proposing a significant change to its crypto tax laws. According to a draft proposal, profits from cryptocurrency trading would be taxed at a flat rate of 25%, starting in 2028. The proposal also includes a grandfathering clause, which means that digital assets acquired before January 1, 2027, will still be treated under the old taxation rules.

Currently, profits from crypto assets are tax-free if held for over 12 months, making Germany an attractive destination for long-term crypto holders. The finance ministry estimates that this new policy will bring in an additional €2 billion ($2.3 billion) in revenue by 2028.

The proposal is the latest development in a broader effort to regulate the cryptocurrency market in Germany. Finance Minister Lars Klingbeil first revealed plans for a crypto tax overhaul at the end of April, sparking debate among industry stakeholders and experts.