Germany to Scrap Tax-Free Crypto Holding Period in 2027
Finance minister Klingbeil confirms Germany will tax crypto gains as capital income from 2027. Why the industry says the reform could backfire.
German finance minister Lars Klingbeil has confirmed that Berlin intends to abolish the country's one-year tax-free holding period for crypto assets. "We want this tax change in place for 2027," the minister said. Gains on Bitcoin and other digital assets would be treated as capital income going forward — closing out a regime German investors have enjoyed for more than a decade.
What's actually on the table
Under current law, German investors pay zero tax on crypto gains once they have held for twelve months. Sell earlier and gains are taxed at the personal income-tax rate of up to 45%. The reform would fold crypto into the capital-income regime — a flat levy of roughly 25% plus surcharge, regardless of holding period. There is no draft bill yet, and critics are already calling the 2027 date a placeholder: a deadline without legislative text behind it.
Industry pushback: the math may not work
The Blockchain Bundesverband (Bundesblock), the industry's main lobby group, argues in a new position paper that the switch could end up costing the treasury money. Short-term traders currently pay up to 45%; a flat tax would cap precisely that revenue stream, while long-term holders simply defer realizations or relocate to friendlier jurisdictions. The group points to Austria, which moved to a 27.5% flat rate on crypto gains in 2022, as a cautionary template rather than a blueprint. Its counter-proposal: keep the holding period and fix enforcement instead — above all the murky tax treatment of DeFi, staking and airdrops.
The trade
For German retail, this is the most consequential tax story in years. As long as the old rules apply, every rally invites front-running: investors sitting on gains past the twelve-month mark have a clear incentive to realize tax-free before the cutoff. From 2027, every realization carries a tax drag of roughly a quarter. The timing is awkward, too — Germany's savings banks and DZ Bank are building retail crypto access for millions of customers right now, and a harsher tax regime lands squarely on that new on-ramp.
The open question is grandfathering. Whether coins bought before 2027 keep their tax-free status has not been settled, and that detail will decide whether late 2026 brings a genuine wave of selling out of Germany or the reform simply bypasses legacy holdings altogether.