Germany's Crypto Tax Law Overhaul: Grandfathering Provisions Set to Expire

The German government has announced a significant change to its crypto tax laws, which will affect investors in the coming months. According to Lars Ehm, a CDU Bundestag member, there is no concrete undertaking in the coalition agreement to continue the one-year holding period for crypto assets. This means that investors who buy after December 31, 2026 will be subject to a new system of taxation.

The current system allows gains on crypto assets held for more than a year to be tax-free, but this will change under the new law. The draft bill proposes a flat 25% withholding tax on gains from crypto assets, regardless of how long they were held. This is set to take effect from the 2027 assessment period.

However, there is a grandfathering provision that allows investors who bought before December 31, 2026 to continue under the old rules. But this only applies if the investor can demonstrate that their assets fall under this category, which could be complicated for those with multiple acquisitions.