Germany Slams Brakes on Crypto Tax Haven with Proposed 25% Flat Rate
The German Finance Ministry has proposed a new taxation framework for cryptocurrency gains, which would impose a flat 25% tax rate on profits from digital asset sales starting in 2028. The current rule allows investors to sell their cryptocurrencies after maintaining ownership for over one year without incurring any tax liability on realized gains.
The proposed system would apply exclusively to cryptocurrency holdings acquired on or after January 1, 2027, and would treat crypto gains as capital income, subjecting them to the same taxation mechanism as profits from equity investments and other financial securities. This reform is expected to generate approximately €350 million in revenue for the government.
The draft proposal has been distributed to other federal government departments for assessment, but it must secure approval from the cabinet and navigate Germany's complete legislative procedures before taking effect. The change aims to eliminate what has been considered one of the most favorable cryptocurrency tax policies in Europe.