Germany to Overhaul Crypto Tax in 2027, Ending 1-Year Exemption

Germany plans to change how it taxes cryptocurrencies from 2027, including a potential end to the one-year tax-free holding period, and aims to raise about €2 billion while strengthening reporting and anti-fraud measures. Finance Minister Lars Klingbeil announced the proposal at an April 29 briefing on the 2027 federal budget and said the government intends to “tax cryptocurrencies differently.” The measures are part of a budget package designed to reduce deficits.

Under current German tax law, private gains from selling crypto are taxable only if the asset is disposed of within one year of acquisition; sales after 12 months are generally tax-free. Guidance issued by the finance ministry in 2022 and 2025 extended that one-year “Haltefrist” to assets used in staking and lending after an earlier plan for a 10-year holding period was dropped. Tax advisers and industry groups have described the one-year rule as an advantage for retail investors.

Some tax professionals and industry executives said removing the 12-month exemption would weaken Germany’s competitiveness as a crypto hub. Robin Thatcher, a crypto tax accountant, warned that abolishing the tax-free disposal period would “significantly weaken Germany’s pull as a crypto hub” and noted that comparable tax regimes elsewhere apply flat rates.

Executives at European crypto firms urged careful design of any change. Eric Demuth, co-founder of exchange Bitpanda, called Austria’s 2022 decision to end its tax-free holding period “an extremely stupid decision,” saying it increased bureaucracy with little fiscal gain. A Bitpanda spokesperson described the German debate as “a critical juncture for Germany’s digital economy” and cautioned that any reform should not become “a mere revenue exercise.” The spokesperson added that projected additional crypto tax receipts would be small relative to the federal budget, about 0.02%.

Erald Ghoos, chief executive of OKX Europe, cautioned that higher taxes without coordinated incentives could reduce adoption and push activity toward offshore platforms that are not subject to the Markets in Crypto-Assets framework.

The tax proposal comes as Germany has expanded crypto reporting. Since January, the country has implemented the EU’s DAC8 rules through a national Crypto Asset Tax Transparency Act that requires crypto asset service providers to report detailed customer transaction data to the Federal Central Tax Office and to other EU tax authorities. Officials say the reporting regime increases information sharing and reduces the scope for undeclared trading.

German officials have not released details on the exact structure of the proposed tax changes or final rates. The finance ministry did not provide further comment on implementation specifics when asked. The proposal is scheduled to take effect in 2027 if approved as part of the federal budget package.