Invest1 publisher3 min readPublished
Germany's 25% crypto tax raises about 23 euros per holder in 2028
The one-year exemption dies only for coins bought after the law starts. Berlin's own first-year forecast is 160 million euros. The clear winners are the traders currently paying up to 42 per cent.
The Investor · Invest desk
What happened
- Germany's finance ministry has drafted a bill abolishing the one-year holding period exemption and applying the flat 25 per cent capital gains rate to crypto profits regardless of how long the coins were held.
- The new treatment would bite on crypto purchased after the law takes effect, with assets acquired before that date staying under existing rules, and taxation of investments made from 1 January 2027 onwards.
- The ministry's revenue expectation is 160 million euros in 2028, growing over subsequent years to reach 350 million euros in 2030.
- From 2028 the tax would be withheld automatically by banks and financial institutions, Handelsblatt reported from the document, with the delay giving providers time to build the systems.
- Die Welt first reported the legislation, which the ruling majority in parliament has not yet adopted and which is still being coordinated inside the federal government.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- decision Every German holder sitting on pre-2027 coins now owns an asset whose exemption cannot be replaced: selling and rebuying converts a permanently tax-free position into a taxable one, so inertia becomes the cheapest strategy for that stock.
- cost Active traders are the beneficiaries, since a top progressive rate of 42 per cent inside twelve months falls to a flat 25 per cent, a 17-point cut, while patient holders lose an exemption worth the whole gain.
- precedent Where the Greens' abolition attempt died in the Bundestag in May, this one comes attached to a coalition budget deal, which is a materially better vehicle for the same policy.
The grandfathering is where this bill's arithmetic lives. Existing holdings stay under existing rules and the new treatment applies only to crypto bought after the law takes effect [7], so the 2028 tax base consists of positions opened and closed inside a window barely a year wide. Run the ministry's own hope for that year backwards through the flat 25 per cent [1]: 160 million euros of receipts [10] implies roughly 640 million euros of realised gains [1], spread across the roughly 7 million German holders the reporting counts [8], which is about 23 euros of tax each [2]. By 2030 the number is 350 million [10], 2.2 times the first year [4], and still a rounding item in a federal budget.
The fiscal case is thin, then, and the rate case is the real one: 25 per cent is what Germany already charges on dividends, stocks and interest [4], and the draft puts coins on that line rather than inventing a levy for them. The consequence sits on the other side of the ledger. Anyone currently churning inside twelve months pays progressive income tax that can reach 42 per cent [11], and a flat 25 per cent is 17 points lower [5], before the solidarity surcharge and, in some cases, church tax that ride on top [12]. The bill raises the price of patience and cuts the price of turnover.
It also does something odd to the pre-2027 stock. A coin bought today and held past its twelve months carries an exemption the draft leaves intact [3][7]; sell it, buy it back, and the replacement is taxable for as long as you own it. The cheapest thing a long-standing holder can do with an old position is nothing, which is a strange incentive to build into a market whose liquidity you presumably want onshore.
This reads differently in two places. If 2028 receipts land well above the 640 million euros of gains implied [1], either the grandfathering is narrower than the version Die Welt reported [13] or the withholding machinery banks and financial institutions must run from 2028 [9] is catching old lots. And the revenue framing is already unstable, because BTC Echo reported the ministry expecting crypto-linked receipts to approach 1 billion euros by the end of the decade [17] while the draft itself carries 350 million for 2030 [10], roughly 35 per cent of that [6]. Either the gap is definitional, since the 1 billion figure for next year also counts proceeds from combating financial and tax crime [16], or someone's number has not survived the coordination round the bill is still in [14].
The rate itself is settled; passage through parliament is the variable still to price. The Greens tried to abolish the exemption and were halted in the Bundestag in May [18]; this version arrives with a summer coalition budget agreement behind it [15] and Klingbeil's finance ministry holding the pen [5], with the AfD among its loudest opponents after winning in Saxony-Anhalt [19]. On 160 million euros of first-year revenue, equal treatment across asset classes is what the coalition is buying with the tax, and equal treatment is cheaper to concede than a billion euros would be.
What to watch
- Whether the 350 million euro figure for 2030 survives the coordination round before cabinet sign-off.
- Whether the 2028 withholding duty is drafted to cover crypto service providers as well as banks and financial institutions.
- Whether the coalition majority holds in the Bundestag, given AfD opposition and the fate of the Greens' attempt in May.