Germany to Remove Tax Exemption for Cryptocurrencies from 2027

Germany may remove the tax exemption for cryptocurrency investors starting in 2027. According to a draft law from the Ministry of Finance, profits from the sale of cryptocurrencies after one year of holding will be subject to tax, and crypto transactions will be taxed similarly to stocks. Currently, investors who hold their cryptocurrency for more than 12 months are exempt from taxes, but selling within less than a year can incur income tax rates of up to 42%. The new draft proposes to eliminate this exemption and subject trading profits to a base tax rate of 25%, which, including solidarity tax, amounts to about 26%. This change could lead to a tax reduction for short-term traders. The German government anticipates that this change will generate approximately 160 million euros in tax revenue by 2028, with this figure expected to rise to 350 million euros by 2031. This proposal has not yet become law and must be approved by the government and parliament.

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