Germany and France propose stricter cryptocurrency tax reforms

Germany and France are moving toward stricter taxation frameworks for cryptocurrency assets.

In Germany, a draft proposal from the Federal Ministry of Finance suggests a fundamental shift in how digital assets like Bitcoin and Ether are taxed. Starting January 1, 2027, the current one-year holding period that allows for tax-free gains would be abolished for newly acquired assets. Instead, gains would be treated as capital income subject to a flat-rate withholding tax of 25% plus the solidarity surcharge. Assets acquired before December 31, 2026, would remain under existing rules, allowing them to stay tax-free after a one-year holding period. Automatic tax withholding via domestic service providers is targeted for implementation by 2028.

In France, the Finance Committee of the National Assembly has passed an amendment to make the exchange of cryptocurrencies for fiat-pegged stablecoins taxable starting January 1, 2027. The proposal aims to close perceived legal loopholes. Additionally, the amendment includes provisions for carrying forward realized crypto losses for ten years and expanding exit taxation to unrealized gains for individuals moving abroad who hold crypto assets exceeding 800,000 euros.