Germany Taxes Bitcoin Like Stocks, Targets Tax-Free Gains

Germany moves to tax bitcoin like stocks as new draft bill targets tax-free gains

Germany’s Federal Ministry of Finance has drafted legislation that would change how private cryptocurrency gains are taxed, bringing them under the country’s flat capital income tax in a move that would end a key advantage for long-term crypto holders.

Under the draft, crypto assets acquired after December 31, 2026 would be taxed at the 25% Abgeltungsteuer (the flat tax applied to capital income such as dividends and stock gains). A 5.5% solidarity surcharge would apply on top of that tax, taking the effective rate to 26.375% (before any church tax considerations).

The ministry’s proposal, led by Vice Chancellor and Finance Minister Lars Klingbeil, would apply the new treatment regardless of how long the crypto is held. That would replace today’s widely used rule under which gains from selling cryptocurrency can be entirely tax-free after a 12-month holding period.

Existing holdings are expected to keep current treatment, meaning crypto bought before the cutoff would remain eligible for tax-free gains after a year. However, some accounts note that the handling of pre-2027 assets may still need to be confirmed as the bill advances through the legislative process.

• Scope: Crypto acquired from January 1, 2027 would be taxed as capital income; earlier acquisitions would generally remain under current rules.
• Rate: 25% flat tax plus 5.5% solidarity surcharge (26.375% effective), similar to stocks and other securities.
• Timing: The planned rules would start in 2027, with the tax taking effect from 2028.
• Allowances: A personal allowance would remain available; Germany currently has a €1,000 exemption threshold for certain private transactions, and the draft also points to the saver’s allowance applying.

The draft has been circulated among other federal ministries for review, according to reporting cited in the provided information. If adopted, the change would align crypto more closely with traditional financial assets in German tax law, removing one of Europe’s most generous long-term crypto tax exemptions.

Fiscal estimates included with the proposal suggest the measure would raise about €160 million in 2028, increasing to roughly €350 million per year by 2031.

The draft also outlines broader tax treatment for certain crypto-related income. Reporting referenced in the description says income from lending and staking would be treated as capital income under the proposal, while some categories—such as NFTs, security tokens, and certain stablecoins and real-world-asset tokens—would remain outside the regime described.

The move comes amid broader political attention on crypto taxation in Germany, including separate initiatives referenced in the provided information, as policymakers weigh how digital assets should fit within existing tax frameworks.