Germany is preparing to end a major tax advantage for long-term cryptocurrency holders, with the Finance Ministry proposing a 25% flat tax on crypto gains from 2028, according to a draft proposal reported by Die Welt.

Under the current rules, individuals can generally sell cryptocurrency without paying tax after holding it for more than 12 months. The provision has made Germany an attractive destination for long-term Bitcoin and other crypto investors.

The proposed regime would apply to crypto assets acquired on or after Jan. 1, 2027. Assets purchased before that date could be grandfathered under the existing rules, according to the reported draft proposal.

Because the measure remains a draft proposal, its final scope and implementation could change before any new rules take effect. If the rules are revised, Germany expects to generate an additional $2.3 billion in revenue from crypto taxation. The change would remove the country’s long-standing tax advantage for holders who retain their assets for more than a year and would bring Germany’s treatment closer to that of other major European markets, where crypto gains are taxed regardless of the holding period.