Germany’s finance ministry has drafted a plan to tax cryptocurrency gains at a flat 25 percent from 2028, according to a report by Cointelegraph citing ministry documents. The proposal would scrap a rule that has made crypto holdings tax free after one year, one of the most generous treatments of digital assets in Europe.
Under current German law, private investors pay nothing on profits from bitcoin, ether and other tokens sold after a holding period of one year. Sales inside the year fall under the personal income tax rate, which can reach 45 percent for top earners. The exemption comes from rules written decades ago for private sale transactions, long before bitcoin existed, and the finance ministry confirmed in 2021 that they apply to crypto as well.
The draft would pull crypto out of that private sale regime and treat gains like interest and dividends instead, which carry a flat capital income tax of about 25 percent plus a solidarity surcharge. The change is scheduled to take effect in 2028, giving holders several years of notice before the new rate applies.
| Regime | Treatment | Status |
|---|---|---|
| Current law, held over 1 year | 0 percent tax on gains | In force |
| Current law, held under 1 year | Personal income tax, up to 45 percent | In force |
| Ministry draft, all gains | Flat 25 percent plus surcharge | Planned for 2028 |
The ministry has not published a full legislative text, and the draft must clear the cabinet and both chambers of parliament before it becomes law. Germany’s government is searching for revenue amid weak growth and heavy spending commitments on defense and infrastructure, and various financial transaction levies have circulated in Berlin for years without passage. A broad capital income measure aimed partly at crypto would be easier to defend politically than a targeted transaction tax.
Industry groups reacted within hours of the report. Trade associations argue the change would push German crypto investors onto foreign platforms and cut against the logic of the EU’s MiCA framework, which sets harmonized licensing and conduct rules for crypto assets across the bloc. Taxation stays a national competence under MiCA, so Brussels cannot veto the plan, but the mismatch between harmonized markets and divergent tax bills is exactly what industry lobbies warned about when the framework passed.
Timing matters for German holders. Bitcoin traded near $79,000 on Wednesday, well below its all-time high above $126,000, and many retail portfolios built during the 2024 and 2025 rally sit in positions that are still inside the one-year window or have just cleared it. Tax advisors in Germany told clients the current rules apply until a law actually passes, so a sale in 2026 or 2027 keeps the exemption. Whether that produces a wave of pre-2028 selling is an open question, and accountants caution that planned exits rarely materialize at the scale headlines suggest.
Germany would not be moving alone. The United States Senate scheduled a cloture vote on the CLARITY Act for September 15, and American investors already pay capital gains rates on long-term crypto sales. In Asia, Japan has reviewed its crypto tax schedule for years, with top rates reaching 55 percent under the current income classification. If Berlin proceeds, the gap between the most and least taxing major developed markets for crypto narrows considerably.
There is also a compliance angle. A flat rate with no holding period is simpler to administer than the current regime, which requires investors to document purchase dates and holding periods for every lot. Exchanges operating in Germany would face pressure to produce annual gain reports for retail customers, similar to the broker reporting the US introduced for digital assets in 2025. German banks and crypto custodians already prepare such statements for securities, so the operational lift is modest.
The draft is expected to face parliamentary scrutiny over the coming year, and the 25 percent headline number may move before a final vote. Opposition lawmakers have already signaled interest in a lower rate for long-term holdings, and coalition partners have not publicly committed to the ministry’s version. Investors planning around the change should watch the cabinet draft rather than the reporting, since early ministry papers routinely get rewritten.
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