Germany's Crypto Tax Exemption at Risk After Cabinet Decision

A petition against scrapping Germany's one-year holding period for crypto assets has hit its quorum inside a week. Petition 201716, open for signature since August 4, 2026, had collected 38,286 online signatures by August 8, well past the 30,000 threshold. The deadline to sign is September 15, 2026.

The trigger was a federal cabinet decision on July 6, 2026, that folded the proposed change into the 2027 draft budget. Under the plan, crypto assets held as private wealth would be reclassified as income from capital assets. The tax exemption after 12 months of holding would disappear.

Current law treats crypto as "other assets" under Section 23 of the Income Tax Act (EStG). Sales within one year of acquisition are taxed at the investor's personal income tax rate – zero to 45 percent, plus solidarity surcharge and church tax where applicable. Hold longer than a year and the gain stays tax-free. A separate exemption limit of 1,000 euros in total gains per calendar year keeps small disposals off the tax return entirely. That limit is often misquoted as 600 euros, which applied through 2023.

The cabinet decision would replace that structure with a flat rate. The figure most often cited is 26.375 percent – 25 percent withholding tax plus the solidarity surcharge. Add church tax and the burden reaches roughly 28 percent, depending on the federal state. Neither figure has been officially confirmed, because the relevant statutory text does not yet exist, the Federal Ministry of Finance said.

Federal Finance Minister Lars Klingbeil announced the change in late April and is quoted as saying crypto gains should be taxed the same way as investment income. In fiscal terms the measure is a consolidation play. The ministry puts the combined contribution from tackling tax crime and crypto taxation from 2027 at around one billion euros; in April the figure under discussion was still around two billion euros. The sums therefore do not relate to crypto assets alone.

The petition is carried by the initiative prohaltefrist.de, an alliance from the German bitcoin scene around the Bitcoin Bundesverband. The text calls for the one-year holding period to be preserved and for crypto assets to retain their classification as "other assets" under Section 23. The grounds cited are legal certainty, protection of legitimate expectations and private wealth formation.

For investors on a high personal tax rate, the switch would not be a disadvantage in every constellation. Anyone selling within the one-year period on a marginal rate of 42 percent pays more today than 26.375 percent. The deterioration falls above all on those who hold positions longer than twelve months and have so far been able to sell free of tax. That group is the one behind the petition.

Two further questions remain open: whether the 1,000 euro saver's allowance would apply, and how losses would be offset in future. Both follow only from the statutory text, which does not yet exist.

For investors with older holdings, the financial impact hangs on a question that has gone unanswered. Would there be grandfathering for crypto assets acquired before a change in the law? The reporting on the cabinet decision expressly notes that this point is unresolved; neither the draft budget nor the accompanying statements commit either way, the initiative said.

Anyone who sells holdings as a precaution ahead of a possible cut-off date is deciding without knowing the future legal position, and may trigger a tax liability that would not have arisen on holding. As long as no ministerial draft exists, the economically right moment for a sale cannot be determined credibly, the petition's backers said. Individual tax questions belong in the hands of a tax adviser.