AfD's Saxony-Anhalt Election Win Raises Pressure on Germany's Bitcoin Tax Fight

The debate over crypto taxation in Germany has taken on a distinctly political dimension. The right-wing Alternative for Germany (AfD), which has drawn attention with its push to preserve Bitcoin's favorable 12-month tax treatment, has won the recent state election in Saxony-Anhalt.

Although the state-level result does not alter federal law or add AfD seats in the Bundestag, it hands the party a platform for its agenda just as Berlin prepares new tax regulations for a market that, according to Chainalysis estimates, generated $24.1 billion in on-chain taxable activity in 2025.

The AfD took 43.8% of party-list votes and 44.3% of first votes across 2,661 polling districts. Chancellor Friedrich Merz's CDU fell to 17.2% of party-list votes — a drop of nearly 20 percentage points compared with 2021 — while voter turnout rose by 17.5 points to 77.8%.

A far-right first place that rattled Berlin

According to Reuters, Merz ruled out any cooperation with the AfD, saying the outcome had shaken the CDU "to its very foundation."

The AfD secured 39 of the parliament's 83 seats, just three short of a majority. Party co-head Tino Chrupalla urged CDU lawmakers to help build what he described as "a center-right conservative majority," increasing pressure on the traditional "firewall" against cooperation with the radical right.

Reuters characterizes the AfD as anti-immigrant and pro-Russia, and the party's Saxony-Anhalt branch has been classified as right-wing extremist by the state's domestic intelligence agency. Co-head Alice Weidel called the result a breakthrough and confirmed the party aims to win at least 40% in the 2029 federal elections.

Where the AfD stands on Bitcoin

The AfD's stance on cryptocurrency predates its recent electoral success. In a Bundestag motion dated October 23, 2025, the party described Bitcoin as "decentralized, non-manipulable, and limited-availability," arguing it should be treated differently from other cryptocurrencies.

The party called for Bitcoin to be excluded from the EU's MiCA framework — the bloc's comprehensive licensing and conduct regime for crypto-asset service providers that took full effect across member states in December 2024 — for the 12-month holding period to be retained, and for private mining and Lightning-node operation not to be classified as commercial activity.

That position resurfaced in May, when the AfD opposed a Greens bill to abolish the holding period, arguing that the state should tax fewer activities and concentrate spending on core government functions.

The exemption Berlin wants to scrap

Under German Finance Ministry guidance, gains on privately held crypto are taxable when acquisition and disposal occur within one year; sales after that period are generally tax-free. The rule treats crypto as a private-sale asset under Germany's income tax framework, which applies similar one-year holding periods to other private assets such as stocks held outside wrappers and precious metals.

The cabinet-approved 2027 budget plan states that new cryptocurrency tax regulations will be introduced, though the accompanying summary does not specify the mechanism. As Cryptopolitan previously reported, citing German media, Berlin intends to eliminate the one-year exemption and raise at least €1 billion per year.

The Green Party attempted the change earlier, advancing a bill on May 6 that would have levied personal income tax on private crypto disposals regardless of holding period. The bill failed in committee on May 20. The Greens had relied on a Frankfurt School study estimating €11.4 billion in additional revenue but used only half that figure in their calculations to remain conservative.

Why the stakes reach beyond one state

Germany is a major crypto market. Chainalysis estimated $24.1 billion in taxable activity for 2025, comprising $2.4 billion in income, $6.1 billion in gains, and $15.6 billion in payments.

Separately, Chainalysis recorded $219.4 billion received in Germany between July 2024 and June 2025, a 54% increase. TRM Labs ranked Germany tenth globally for Q1 2026 retail crypto volume at $25.3 billion, down 20% year over year.

That scale gives the tax dispute significance beyond Germany's borders. Eliminating the holding-period exemption could alter long-term investor behavior and sharpen competition among European jurisdictions for crypto capital and users. Saxony-Anhalt cannot set federal tax policy, but the AfD's result gives one of the loudest opponents of the change a stronger political megaphone as the debate advances, and the outcome of the fight will shape how other EU member states weighing similar exemptions approach the question.

Source: Cryptopolitan