Germany Moves to End Its Bitcoin Tax Break

Germany is preparing to scrap its one-year tax-free exemption for long-term crypto holdings, a move that would end one of Europe's most generous regimes for bitcoin and other digital assets. Finance Minister Lars Klingbeil has finalized a plan that would take effect from 2027. Today, investors who hold bitcoin:native or other cryptocurrencies for more than 12 months can sell tax-free. Under the proposal, crypto profits would be taxed like equities at the standard 25% capital gains rate, plus a solidarity surcharge, regardless of how long the assets are held. The measure is built into the 2027 federal budget, aiming to raise about €2 billion in additional annual revenue as the government grapples with a projected €98 billion deficit. It is the fourth attempt to remove the exemption in the past 18 months; earlier efforts fell short, but embedding the change in a budget package is expected to make it harder to block. Cabinet approval is expected this week. Legal challenges may follow. Constitutional scholars have warned that taxing crypto more harshly than other private assets could violate Germany's equal-protection principle.