Germany's Crypto Tax Plan Criticized for Targeting Retail Investors
Circle's Patrick Hansen is warning that Germany's proposed crypto taxation framework could unfairly burden retail investors. The framework, which includes a default 50% tax base, would require taxpayers to provide evidence of payment to avoid being taxed on half of their income earned.
Hansen fears that this provision will disproportionately affect ordinary consumers and investors who cannot verify their purchases and may end up paying more in taxes than they should. He argues that the state's assumption that crypto values will double appears overly high, given the poor performance of many cryptocurrencies, including Bitcoin.
The proposed framework also includes a flat 25% levy on crypto capital gains, plus a solidarity surcharge of 5.5%, for a total of 26.375%. Some digital currencies, such as NFTs and certain stablecoins, would be exempt from the new legislation.
Dr. David Hötzel, an associate partner at the Poellath law firm, noted that the 50% baseline is not yet set in stone and could be adjusted. However, he also emphasized the importance of reliable documentation in protecting existing holdings.