Germany's Crypto Tax Reform Leaves One-Year Holding Period Intact
The German federal cabinet has finalized a draft of an Income Tax Reform Act for 2027 without any changes to the taxation of crypto assets. The one-year holding period for private gains remains intact, and the reform's focus is on providing relief for low- and middle-income families.
The reform aims to increase the basic tax-free allowance from 12,564 euros in 2027 to 12,900 euros in 2028, while also introducing a new tax bracket of 47 percent for annual incomes above 280,000 euros. Child benefit will rise by 5 euros per month, and the employee lump-sum allowance will increase from 1,230 to 1,430 euros.
The omission of crypto assets in the reform draft is significant because it suggests that any changes to the taxation of cryptocurrencies are unlikely to happen soon. The one-year holding period remains a crucial factor for tax planning, especially since the statutory text specifies that gains from private disposal transactions remain tax-free if the interval between acquisition and disposal is more than one year.
The reform's direction is still uncertain, with several drafts proposing different models for treating existing holdings. Some proposals involve abolishing the holding period, while others suggest reclassifying crypto gains as investment income or introducing a higher rate instead of a new system.