Germany to Tax Crypto Investments at 25%

The German finance ministry has proposed a new tax on cryptocurrency investments, aiming to raise an estimated €160 million in revenue by 2028. Under the draft plan, gains from crypto assets bought after January 1, 2027, would be subject to the standard 25% withholding tax. This rate is already applied to dividends, interest, and share sales in Germany.

The current exemption for long-held cryptocurrencies, which makes gains on coins held for over a year tax-free, would end under this new plan. However, those who own crypto before December 31, 2026, would be grandfathered, retaining the existing rules. This means they could continue to hold their assets for at least a year without incurring taxes.

The proposal is part of an effort to bring cryptocurrency investments in line with traditional forms of private capital investment. Finance Minister Lars Klingbeil has stated that profits from speculation in crypto assets should be taxed, as they currently remain largely tax-free.