Germany is putting a deadline on tax-free Bitcoin (BTC). Buy before December 31, 2026 and the old rules follow your coins, but buy later and the taxman comes.
That date sits inside a draft law from the finance ministry, and while nothing has passed yet, German investors are already doing the arithmetic.
The Rule That Made Germany Different
For years, Germany had it such that you hold your crypto for 12 months and the profit was yours, untaxed. Sell sooner and you paid income tax, up to 42%.
It gave a country famous for paperwork a reputation as one of Europe’s friendliest homes for long-term crypto holders.
The draft seen by Handelsblatt kills the clock, with every sale expected to become taxable. Gains would meet a flat 25% withholding tax, the same one Germany charges on shares and dividends.
A solidarity surcharge also lands on top, so that the first €1,000 ($1,163) of yearly gains stays free, and losses could finally be written off against other gains.
The Part That Stings
The ministry says the exemption rewards speculation.
“It is unfair that hard-earned income and capital gains are taxed, while profits from speculation with crypto assets remain largely tax-free,” read the report, citing the German Federal Ministry of Finance.
Yet under this draft, the speculators do better. A top-rate trader flipping coins inside a year pays 42% today. They would pay roughly 26%.
The person who bought quietly and waited goes from zero to roughly 26%. Berlin expects €160 million ($186.2 million) from all of this in 2028, reaching €350 million ($407.35 million) by 2031.
It still has to survive cabinet, the Bundestag and the Bundesrat, Germany’s two parliamentary chambers. Lawmakers rejected a similar attempt in May.
BeInCrypto saw this coming in July, when the budget framework quietly targeted the tax exemption. Exchanges would only withhold the money automatically from 2028, in step with wider crypto tax reporting rules.
Until parliament votes, the clock is still running.