Germany Proposes 25% Flat Tax on Crypto Gains in Draft Bill

Germany would tax profits on crypto sales at a flat 25% regardless of how long the asset was held, under a draft bill from Vice Chancellor and Finance Minister Lars Klingbeil seen by Handelsblatt. Welt reported it first on Tuesday, from a departmental draft dated mid-August.

The law would take effect on January 1, 2027, and apply only to crypto bought from that date. Anything acquired earlier stays under today's rules, so anyone already holding Bitcoin keeps the exemption.

Germans currently pay nothing on crypto gains once they have held an asset twelve months, a position the ministry set out in 2022 and extended to coins used for staking and lending. Sell inside that window and the profit is taxed as ordinary income, up to 42% for higher earners. Critics have noted that scrapping the holding period lands on long-term investors more than the speculators it describes.

Gains would be treated like dividends, share profits and interest, at the flat rate plus a solidarity surcharge of 5.5% of the tax, an effective 26.375% before church tax. The €1,000 saver's allowance would apply, and losses could be offset against gains, including those on shares.

Income from lending and staking would count as capital income too, per Welt's account of the draft. NFTs, security tokens, some stablecoins and some real-world-asset tokens would stay outside the regime.

Platforms get a year

Automatic withholding would not start until 2028, when banks and other providers would remit the tax directly, as on other capital income. The delay gives platforms a year to build systems.

Providers could rely on purchase prices and acquisition dates supplied by customers when assets move between platforms. Where a customer cannot produce them, the flat rate would apply regardless.

The bill argues crypto has outgrown its treatment. Crypto assets "increasingly represent a form of private capital investment," it says, and the change would end a special status that has treated them like other economic goods, such as classic cars or artworks.

The ministry was blunter. "It is unfair if hard-earned income and capital gains are taxed while profits from speculation with crypto assets remain largely tax-free," it said.

Revenue would be modest, at €160 million in 2028 rising to €350 million a year by 2031. The draft is still in early coordination within the federal government and could change, though the Union and SPD agreed to tax crypto during summer budget negotiations.