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- Germany’s Federal Ministry of Finance is pursuing a plan to classify cryptocurrency trading gains as capital income and apply a 25% flat tax rate.
- The new tax framework could take effect as early as 2028, and the ministry expects additional tax revenue to rise from 160 million euros in 2028 to 350 million euros in 2031.
- If the revision is adopted, the current tax exemption for gains on cryptocurrencies held for more than one year would be scrapped, and the same rate would apply to cryptocurrency gains regardless of the holding period.
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Germany is pushing a plan to levy a 25% tax on gains from cryptocurrency trading.
BlockBeats and other outlets reported on September 9 that a recent working-level draft on crypto taxation prepared by Germany’s Federal Ministry of Finance would classify profits from crypto sales as capital income, similar to stock gains, and apply a flat 25% tax rate regardless of how long the assets were held.
The new tax framework could be introduced as early as 2028. The Finance Ministry projects additional tax revenue of 160 million euros in 2028, rising to 350 million euros by 2031.
If adopted, the revision would mark a shift in Germany’s tax exemption for certain crypto gains. Under the current system, profits earned by individual investors from selling cryptocurrencies such as Bitcoin after holding them for more than one year are exempt from tax. Gains from crypto sold within one year are subject to individual income tax rates.
German authorities reportedly view cryptocurrencies as financial assets with high liquidity and a speculative character, making it necessary to apply the same tax treatment used for stock trading gains.
The proposal is still at the Finance Ministry draft stage. Its details could change as it goes through consultations within the government, cabinet approval and parliamentary review.
Source: en.bloomingbit.io