Germany Targets Crypto Tax Exemption with 25% Levy

The German government has proposed a new tax plan that would bring cryptocurrency gains under the country's capital income tax, or Abgeltungsteuer. The proposal would impose a flat 25% tax rate on crypto assets held for more than one year, replacing the current exemption.

The new rules would apply to crypto assets purchased after January 1, 2027, and take effect in 2028. The Finance Ministry estimates that the measure would generate around €350 million in additional tax revenue annually.

Under the proposed system, gains from digital assets could be offset against losses from stocks and other securities. However, it is unclear whether previously purchased holdings will retain their existing tax treatment or come under the new rules.