The German Ministry of Finance is advancing a draft adjustment to the crypto taxation system. According to the information disclosed so far, Germany plans to impose a uniform tax of 25% on profits from the sale of crypto assets starting from January 1, 2027, in addition to a solidarity surcharge. The draft is still in the coordination phase within the federal government.
Only applicable to assets purchased after 2027.
The new regulations only apply to crypto assets purchased after January 1, 2027. Assets such as Bitcoin that were already held prior to this date will continue to be governed by the current rules and are not directly affected by this adjustment.
The current rule in Germany is that if crypto assets are held for 12 months before being sold, the profits are generally not subject to taxation; however, if sold within 12 months, they are taxed as ordinary income, with the highest tax rate for high-income individuals reaching 42%.
Pledge and lending income included in the scope
According to the draft content disclosed by foreign media, earnings from lending and staking will also be considered capital income and will be included in the new tax system. NFT, security tokens, some stablecoins, and certain real-world asset tokens are not currently covered by these rules.
The draft states that crypto assets are increasingly becoming closer to private capital investment tools and should no longer be treated as ordinary economic goods. The German Ministry of Finance also argues that it is unfair for labor income and other capital gains to be taxed, while most crypto speculation gains are exempt from tax.
The platform will withhold and remit taxes in the 2028s.
Automatic deductions will not be implemented simultaneously in 2027. According to the draft arrangements, banks and other service providers will start deducting and paying the relevant taxes directly from 2028 onwards, to give the platform one year to complete the system transformation.
If users transfer assets between different platforms, the platforms may calculate the tax amount based on the purchase price and purchase date provided by the users; if users are unable to provide this information, the draft states that a unified tax rate can still be applied.
Fiscal revenue is expected to be limited.
The draft estimates that this new tax regime could generate approximately 160 million euros in fiscal revenue in 2028, and around 350 million euros per year by 2031. Although the relevant text is still in its early stages, the German Union Party and the Social Democratic Party have reached an agreement on the direction of taxing cryptocurrencies during the summer budget negotiations.
