Germany Prepares to Slap 25% Tax on Long-Term Crypto Gains

The German government is planning to introduce a 25% tax on profits from long-term cryptocurrency investments, which are currently exempt from taxation in the country. The new bill, drafted by the Bundesfinanzministerium, aims to start taxing profits resulting from cryptocurrency investments made from January 1, 2027 onwards.

The current exemption for holding period of one year will be scrapped, and the 25% rate will apply to all crypto gains. This means that holders of Bitcoin, Ethereum, or any other cryptocurrency will have to pay the state what's due from their profits, regardless of how long they kept the coins.

According to a draft law put forward by Finance Minister Lars Klingbeil, the tax will be withheld automatically by banks and financial institutions starting from 2028. The Bundesministerium für Finanzen (BMF) hopes to receive €160 million in 2028, with revenue expected to grow to €350 million in 2030.

The new bill is still being coordinated within the federal government, and some of its provisions may be amended in the coming weeks. The coalition government of Chancellor Friedrich Merz wants to scrap the exemption and impose the 25% rate on all crypto gains, making it a major political issue in Germany.