Germany Drafts 25% Crypto Tax to Start in 2027

Germany's finance ministry has drafted a bill that would end tax-free crypto holding and introduce a flat 25% tax on gains from crypto sales. Including the 5.5% solidarity surcharge, the effective rate would reach 26.375%, and it would apply only to assets purchased after January 1, 2027.

The document comes from Vice Chancellor and Finance Minister Lars Klingbeil. Welt first reported on the draft, based on a departmental version dated mid-August, and Handelsblatt has also seen the details. The document is still going through internal coordination, so the final wording of the law could differ from the draft.

A 26.375% Rate Instead of Today's Zero

Since 2022, Germany has let anyone who holds Bitcoin, Ether or another asset for more than 12 months sell it completely tax-free. That exemption was later extended to coins used in staking and lending. A sale before that window counts as ordinary income, taxed at rates up to 42% for high earners.

The new bill removes the holding-period idea altogether. Crypto gains would be treated like dividends, stock profits and bank interest, taxed at a flat 25% plus a 5.5% solidarity surcharge on the tax owed. Combined, that comes to 26.375%, before any church tax paid only by members of certain denominations.

Existing Coins Keep Their Old Protection

The bill's key detail is its start date. The new rules apply only to assets bought from January 1, 2027 onward. Anything a person already holds in a wallet or exchange account stays under the current rule. A year of holding still means a tax-free sale.

Automatic withholding by banks and platforms would not begin until 2028, following the same process used for other capital income. The year between the law taking effect and withholding starting gives exchanges and banks time to build reporting systems. Platforms would rely on purchase prices and acquisition dates supplied by customers when assets move between services. Where a customer cannot produce that data, the flat rate would apply with no exceptions.

Who Pays More, Who Keeps the Break

Critics point to a contradiction: removing the holding period hits long-term investors harder than the speculators the bill blames for the change. Those who held assets for years specifically for the tax break would lose that advantage on anything bought after 2027.

The 1,000 euro annual saver's allowance stays in place, and losses could be offset against gains, including gains on stocks. Income from staking and lending would also count as capital income. NFTs, tokenized securities, some stablecoins and some real-world-asset tokens would stay outside the new regime. Most EU countries already tax crypto gains regardless of how long an asset was held, and Germany's long-standing exemption was the outlier among its neighbors, a big reason it kept topping rankings of Europe's most crypto-friendly jurisdictions.

The Coalition Already Agreed on This Over the Summer

The draft is still in early coordination within the federal government and could change before reaching the Bundestag. Still, the Union and the SPD agreed to tax crypto during summer budget negotiations, so the direction is already set.

The ministry states its reasoning more bluntly than the bill's text: it calls it unfair that hard-earned income and capital gains get taxed while profits from crypto speculation have largely stayed tax-free for years. The bill frames crypto as a form of private capital investment that has outgrown a status once shared with classic cars or artworks. The next step is debate in the Bundestag, where opposition factions could push their own changes, so the final rate and timeline may still shift.

What Crypto Holders Can Do Before 2027

Holders have a little over a year to plan ahead. The market is already weighing a few options:

• Buy before the end of 2026 to lock in the old tax-free treatment after a 12-month hold.
• Move some assets to platforms outside Germany, though that does not change tax residency.
• Keep records of purchase prices: without verified data, platforms will apply the flat rate with no exceptions.
• Wait for the final version, since the bill could still change during debate in the Bundestag.

What It Means for the Market

Germany has long been seen as one of Europe's most crypto-friendly countries, largely because of its zero tax on year-long holdings. This bill changes that reputation, even though it leaves nearly two years before any money actually gets withheld. The budget effect stays modest: 160 million euros in 2028 versus 350 million euros in 2031. The fiscal goal here clearly takes a back seat to aligning crypto with how other income gets taxed. For scale, Germany's corporate tax revenue runs into tens of billions of euros a year, so the projected 350 million euros looks more like a symbolic figure than a budget driver.

The bigger signal for the market is different. Major EU economies are moving from light-touch crypto rules toward the same tax treatment used for stocks. Ukraine still has not passed its own law on taxing virtual assets, a draft that has been under discussion since 2022. Germany's approach could well become a reference point for Ukrainian regulators once the topic returns to parliament.