Germany Proposes Flat Tax on Crypto Gains Starting 2027
Germany is proposing a significant change to its tax laws regarding cryptocurrency investments. From January 1, 2027, crypto gains will no longer be exempt from taxation if held for more than one year. Instead, profits from Bitcoin and other digital assets would be taxed at a flat rate of 25%, making them closer in treatment to stocks.
The current rule allows investors to avoid taxes on their cryptocurrency holdings when they hold the assets for over 12 months. However, this exemption will end for investments made after December 31, 2026. Existing Bitcoin holdings would still be grandfathered under the old system.
The new proposal is expected to raise around €160 million in additional revenue in 2028 and approximately €350 million annually by 2031. Germany's Finance Ministry defended the change by stating that it is unfair for profits from speculation with crypto assets to remain largely tax-free while other forms of income are taxed.