German Finance Ministry plans to tax cryptocurrency gains from January 2027, ending the current 12‑month tax‑free holding period
Executive summary: The German Federal Ministry of Finance is considering a new tax on cryptocurrency gains that would take effect 1 January 2027, removing the existing exemption for assets held more than twelve months. The change would increase tax liabilities for crypto investors, potentially influence trading volumes and asset prices, and provide additional revenue for the German budget.
Who is involved: German Federal Ministry of Finance, Cryptocurrency investors and traders, Crypto exchanges and wallet providers operating in Germany, Bundesrat and Bundestag (future legislative bodies)
Likely next: A draft amendment to the Income Tax Act (EStG) will be released for public consultation in Q4 2026, followed by parliamentary debate and a possible Bundesrat vote in mid‑2027.
According to Handelsblatt, the German Federal Ministry of Finance is preparing legislation that would treat profits from crypto assets held longer than a year as taxable income, a shift from the present rule that allows such gains to remain tax‑free after a one‑year holding period. The move aims to increase fiscal revenue and align crypto taxation with other financial instruments, but it could affect investor behavior and market dynamics in Germany’s growing crypto sector. No formal draft has been published yet, and the proposal is still under internal review.
What's next — scenarios
Base: Tax enacted as planned (50%)
Crypto gains held >12 months become taxable from 1 Jan 2027, raising effective tax rates for long‑term holders.
- Draft bill published by end Q4 2026
- No major amendments during parliamentary committee review
Upside: Tax delayed or softened (30%)
Implementation postponed beyond 2027 or exemptions retained for certain tokens, limiting immediate fiscal impact.
- Industry lobby group submits amendment proposal by Nov 2026
- Finance Ministry announces a review of the proposal after stakeholder feedback
Downside: Stricter tax regime (20%)
Tax applied to short‑term gains (<12 months) as well, or a lower tax‑free threshold introduced, increasing burden on traders.
- Finance Ministry proposes taxation of short‑term crypto gains
- Coalition partners demand higher revenue target in budget negotiations
What to watch
- Publication of draft crypto tax legislation (expected Oct 2026)
- Bundesrat vote on the tax amendment (projected Jun 2027)
- German Federal Ministry of Finance press conference on crypto taxation (quarterly)
- EU MiCA implementation timeline (effective Jan 2027) – potential overlap with national rules
Timeline
- — Steuern: Finanzministerium plant wohl neue Besteuerung von Kryptowerten ab 2027 (Handelsblatt)
Analysis — what this means
Likely next events
- Draft legislation expected Q4 2026
- Public consultation period ends Dec 2026
- Bundesrat approval projected mid‑2027
Sectors affected
- Cryptocurrency exchanges
- Digital asset investment funds
- German retail crypto investors
Regulatory implications
- Amendment to German Income Tax Act (EStG) to tax crypto gains after 12‑month holding
- Requirement for crypto service providers to report transactions to the Federal Central Tax Office
- Potential alignment with EU MiCA reporting standards for crypto‑asset service providers
Historical parallels
- Germany introduced a 25 % withholding tax on speculative securities in 2009
- France imposed a crypto‑to‑crypto transaction tax in 2019