Germany proposes 25% flat tax on new cryptocurrency gains

The German Federal Ministry of Finance is drafting a proposal to fundamentally change the taxation of cryptocurrency gains. Under the current rules, private investors can typically sell cryptocurrencies tax-free if they have held them for more than one year. The new draft proposes replacing this holding period with a flat 25 percent capital gains tax (Abgeltungsteuer) for all newly acquired crypto assets.

The proposed regulations are intended to apply to assets purchased after December 31, 2026, meaning existing holdings would not be taxed retroactively. If implemented, automatic tax deduction is planned to begin on January 1, 2028. The government expects this measure to generate approximately 160 million euros in additional revenue in 2028, potentially rising to 350 million euros annually by 2031.

In response to the draft, former FDP lawmaker Frank Schäffler has launched a campaign urging citizens to contact CDU constituency representatives. Schäffler argues that the removal of the holding period is problematic, particularly for self-custody investors who may struggle to provide seamless documentation of purchase prices and dates years later to satisfy tax authorities.