Germany Ditches Crypto Tax Break: 25% Flat Rate for New Purchases Starting 2027

Germany is revamping its tax rules for crypto investors by removing a long-standing exemption for assets held for more than one year. Starting from January 1, 2027, profits from cryptocurrency sales will be treated as capital income and taxed at a flat rate of 25%. The solidarity surcharge adds another 1.375%, making the effective tax rate 26.375%.

The new proposal, which still needs to go through the legislative process, affects only new crypto purchases made after December 31, 2026. Existing Bitcoin and other qualifying assets held before this date will remain exempt from taxes for one year.

Investors who buy or sell cryptocurrencies in the future can expect a €1,000 savings allowance and the ability to offset losses against gains, including those from securities.

The government estimates that the new tax rules will generate approximately €160 million in additional revenue by 2028, increasing to around €350 million annually by 2031. The Finance Ministry defended the change by stating, 'It is unfair if hard-earned income and capital gains are taxed while profits from speculation with crypto assets remain largely tax-free.'