Germany's Cabinet Set to Decide on Crypto Tax Reform Amid Tight Deadline for Comments

Crypto tax reform is on the agenda for Germany's cabinet on October 14. Associations have until October 6 to comment on the draft bill, which was sent out by the Federal Ministry of Finance on September 30.

The key date for investors is December 31, 2026. Anything acquired or received up to that point will keep its current tax status under the one-year holding period rule. However, as of January 1, 2027, new rules will apply, shifting gains from private disposals to income from capital assets.

The draft bill aims to reclassify exchange crypto-assets, including Bitcoin and Ether, which currently fall under Section 23 of the German Income Tax Act. Under the proposed changes, these assets will be taxed as capital income, with a 25% tax rate plus solidarity surcharge for acquisitions from 2027.

The shift from Section 23 to Section 20 means investors will no longer have a holding period to avoid taxes on gains. However, they may still offset losses within capital income under the new system.