Germany is set to introduce a 25% tax on cryptocurrency gains starting in 2028. This change will eliminate the existing relief under which assets held for more than one year are exempt from taxation. The new rules apply to crypto assets acquired after January 1, 2027, and could generate an additional approximately 350 million euros in tax revenue. Currently, crypto assets sold after a one-year holding period are exempt from taxes, while gains from sales within 12 months are subject to income tax, which can reach up to 45%. A transitional period will allow existing asset holders to retain their current tax exemption.
Germany's Federal Ministry of Finance has introduced a draft legislative act aimed at integrating crypto asset gains into the capital gains tax system, creating more equitable conditions for taxation. Under the proposal, cryptocurrency gains will be eligible to be offset against losses from stocks and other securities. Additionally, a solidarity surcharge of 5.5% will apply to gains under the new tax framework. On top of the base rate of 25%, the solidarity surcharge of 5.5% is applied to the tax amount, resulting in an effective rate of 26.375% before the church tax deduction. A personal tax allowance of €1,000 for private crypto asset transactions will also be retained.
The planned changes are part of broader government efforts to combat tax fraud and undeclared economic activity. Finance Minister Lars Klingbeil previously emphasized the need for fair taxation, stating: "It is unfair that income from labor and capital gains are taxed while profits from cryptocurrency speculation remain largely tax-free." This statement underscores the government's intention to improve the tax system, but also reflects divisions among parliamentary parties over the question of abolishing the tax exemption.