Klingbeil proposes 25% tax on crypto gains

Profits from Bitcoin, Ether and other cryptocurrencies could soon lose their tax-free status in Germany. A draft law from Finance Minister Lars Klingbeil’s ministry would bring crypto speculation under the 25% capital gains tax from 2028.

The proposed rate would apply to cryptocurrencies acquired after Jan. 1, 2027. Taxpayers would keep an annual allowance, currently 1,000 euros, and people whose personal tax rate is below 25% could seek a more favorable assessment. The existing savings allowance would also apply to crypto speculation.

Under the draft, crypto gains could be offset against losses from shares or other securities. The proposal would also abolish the current one-year holding period, after which crypto profits can become tax-free. At present, gains are treated as proceeds from a sale and can face an individual tax rate of up to 45% if the assets are sold within a year.

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Crypto assets are increasingly becoming a possible form of private investment and are being bought and sold on a growing market.

The ministry expects the changes to raise about 350 million euros. The draft forms part of an action plan by Klingbeil’s ministry to combat tax evasion and undeclared money, with the broader measures expected to generate about 1 billion euros. The draft has been circulated to other ministries for approval and was obtained by Der Spiegel, which said Welt first reported it.

The ministry defended the proposal by saying, "It is unfair if hard-earned income and capital gains are taxed, but profits from speculation in crypto assets remain largely tax-free."

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It is unfair if hard-earned income and capital gains are taxed, but profits from speculation in crypto assets remain largely tax-free.