German finance ministry proposes 25% crypto tax starting in 2028: Report
Key Takeaways
- •Germany's Finance Ministry has drafted a plan to tax cryptocurrency trading profits at a flat 25% rate beginning in 2028.
- •The proposed tax would apply only to crypto assets acquired after Jan. 1, 2027, with earlier purchases protected by grandfathering provisions.
- •Under current German law, crypto profits become entirely tax-free after a holding period of more than 12 months, a rule that attracted long-term holders.
- •Finance Minister Lars Klingbeil said in late April that Germany expects to collect an additional 2 billion euros, or about $2.3 billion, from crypto taxation.
- •As a draft, the proposal must still move through Germany's legislative process before any of its terms take effect.
Germany's Federal Ministry of Finance is reportedly proposing a 25% tax on cryptocurrency trading profits from 2028, replacing current rules under which crypto gains can become tax-free after a one-year holding period.
According to a draft proposal seen by German news outlet Die Welt on Wednesday, the measure would apply to all crypto assets acquired after Jan. 1, 2027. The proposal would introduce the standard 25% flat-rate tax for profits from cryptocurrency trading beginning in 2028. The 25% figure corresponds to the flat rate Germany applies to other capital gains, which would bring crypto trading profits under the country's standard investment taxation framework.
The draft reportedly includes grandfathering provisions. Under those protections, digital assets purchased before Jan. 1, 2027, could continue to be treated under the existing taxation rules.
Under Germany's current law, profits from crypto assets become entirely tax-free when the assets are held for more than 12 months. The rule has made Germany a favorable tax destination for long-term cryptocurrency holders.
Finance Minister Lars Klingbeil first disclosed the government's plans for a crypto tax overhaul at the end of April. At the time, he said Germany expected to collect an additional 2 billion euros, or about $2.3 billion, in revenue from crypto taxation.
The reported proposal would represent a departure from the current long-term holding exemption, although the draft's grandfathering provisions could preserve that treatment for assets acquired before the proposed cutoff date. With an acquisition cutoff of Jan. 1, 2027, and taxation beginning in 2028, the reported timeline would leave a window in which existing holdings remain under the current rules while the new regime phases in. As a draft, the proposal would still need to move through Germany's legislative process before any of its terms take effect.
Cointelegraph has approached the German Finance Ministry for further details about the draft law. The original report was published by Cointelegraph at this link.
