Germany is preparing to tighten cryptocurrency taxation from 2027, putting the country's long-standing tax-free holding benefit for Bitcoin under renewed scrutiny. Finance Minister Lars Klingbeil said during an April 29 presentation of Germany's 2027 federal budget that the government intends to 'tax cryptocurrencies differently' as part of a package designed to generate an additional €2 billion ($2.3 billion) in revenue while strengthening measures against financial and tax crime.
One-Year Holding Exemption on the Chopping Block
Under Germany's current framework, profits from private crypto sales are taxed if assets are sold within one year of purchase. Coins held longer than 12 months are generally exempt from capital gains taxes, a rule that has helped Germany build a reputation as one of Europe's more favorable jurisdictions for long-term crypto investors. Guidance published by Germany's finance ministry in 2022 and reaffirmed in 2025 extended the same one-year 'Haltefrist' treatment to tokens used in staking and lending activities, after officials abandoned an earlier proposal that would have imposed a 10-year taxable period on such assets.
Klingbeil did not directly mention the one-year exemption in his remarks. Still, industry groups, including the German Bitcoin Association, said the holding rule remains the most likely target if Berlin wants to secure meaningful revenue increases from crypto taxation. Robin Thatcher, a Bitcoin and cryptocurrency tax accountant, warned that ending the tax-free disposal period would 'significantly weaken Germany's pull as a crypto hub,' adding that other countries 'should be copying this policy rather than Germany changing it.'
Austria's Precedent: 27.5% Flat Tax After Removal
Germany is not the first European country to consider scrapping the crypto holding exemption. Austria introduced a similar policy overhaul in 2022 after removing its own tax-free holding period and applying capital gains taxes to crypto regardless of holding duration. Bitpanda co-founder Eric Demuth criticized the move in a March 12 post on X, saying it created 'hardly any additional benefit' for the government while increasing bureaucracy and operational complexity for both users and crypto companies. Demuth also warned Germany against adopting the same approach.
According to Thatcher, Germany could end up closely aligned with Austria's 27.5% flat tax model if the exemption disappears. He added that Germany would also move closer to the United Kingdom's 24% top capital gains tax rate, removing one of the country's competitive advantages for crypto investors and startups.
Regulatory Tightening Meets Bank Expansion
Even as tax policy uncertainty grows, Germany is expanding its crypto oversight under the European Union's DAC8 reporting regime. Since January, Germany has enforced the EU's Crypto Asset Tax Transparency Act, requiring crypto asset service providers to share detailed customer transaction records with the Federal Central Tax Office and other EU authorities. The framework has reduced opportunities for undeclared crypto trading across the bloc.
Meanwhile, German banks continue expanding into regulated digital asset services. In January, DZ Bank, Germany's second-largest financial institution, received approval from BaFin to launch its 'meinKrypto' trading platform under the EU's Markets in Crypto-Assets Regulation framework. DZ Bank's expansion followed similar crypto initiatives from DekaBank and LBBW, both of which introduced institutional-focused digital asset services during 2024 through partnerships tied to regulated custody and trading infrastructure.