Germany plans to end its tax-free Bitcoin holding status by 2027, proposing a 25% flat withholding tax on all gains to curb speculative trading and generate up to €350 million in annual revenue by 2031.
The German Federal Ministry of Finance has introduced a draft law that threatens to eliminate the current 12-month tax-free holding period for Bitcoin. If enacted, this policy would impose a flat 25% withholding tax plus a solidarity surcharge on all crypto gains, fundamentally altering the long-term investment incentive structure for German residents.
Currently, profits from Bitcoin held for more than 12 months are completely tax-free for individual investors.
The draft law proposes that the new 25% withholding tax would apply to purchases made after December 31, 2026.
Germany's Finance Ministry has introduced a draft law to eliminate the 12-month tax-free holding period for Bitcoin. If passed, all crypto sales would be subject to a 25% flat withholding tax starting in 2027, aligning digital assets with existing stock and dividend taxation policies.
The draft law suggests that assets acquired before December 31, 2026, may retain their current tax-free status, though the legislation is still subject to parliamentary approval.