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German cryptocurrency taxation and fraud developments

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2026-09-10 10:23 UTC → 2026-09-10 20:16 UTC · added ~~removed~~

The German Federal Ministry of Finance has been involved in two distinct developments regarding cryptocurrency. On September 5, 2026, the ministry issued a warning about a sophisticated scam involving forged letters. These fraudulent communications claim a 19 percent Value Added Tax (VAT) is due on cryptocurrency purchases, using actual transaction data to appear legitimate. Separately, the government is considering a fundamental reform to cryptocurrency taxation. A draft proposal suggests that gains from assets like Bitcoin and Ether could be subject to withholding tax (Abgeltungsteuer), regardless of the holding period. This would end the current tax-free status for assets held longer than twelve months. The proposed reform would apply to holdings acquired after December 31, 2026, with implementation expected to begin in 2027 and automatic withholding by service providers starting in 2028. Recent details from the draft proposal indicate that the reform would treat disposal gains, as well as income from lending and staking, as capital income. Under the proposed rules, gains could be subject to a flat-rate withholding tax of 25 percent, plus the solidarity surcharge and potentially church tax. While the reform would remove the long-term holding exemption, a personal annual exemption threshold of 1,000 euros is expected to remain in place. To prevent retroactive taxation, the draft includes a grandfathering clause: assets purchased on or before December 31, 2026, would remain under the existing rules, allowing for tax-free sales after a one-year holding period. The Ministry views cryptocurrencies as a form of private capital investment, making them more comparable to stocks and funds than to traditional private assets. The Ministry expects the measure to generate approximately 350 million euros in additional tax revenue. The draft legislation is currently undergoing review within the federal cabinet and must pass through the Bundestag and Bundesrat to become law.

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