Germany is weighing a plan to eliminate its 1-year crypto tax exemption, with a potential effective date of 2027. The move, still in the discussion phase, would remove the rule that currently lets investors sell digital assets tax-free after holding them for at least 12 months.
The proposal
Under current German tax law, individuals who hold cryptocurrencies for more than one year pay no capital gains tax on any profits from a sale. That exemption has made the country a relatively attractive jurisdiction for long-term crypto investors. The government is now considering ending that benefit starting in 2027.
If enacted, the change would mean that any crypto sold after 2026 would be subject to the standard capital gains tax rate, regardless of how long the asset was held. The timeline — 2027 — gives investors at least a year of runway to adjust their strategies, but the uncertainty alone could shift behavior. Some holders may accelerate sales before the deadline to lock in tax-free gains.
Timeline
The proposal is not yet law. It must go through Germany's legislative process, which typically involves multiple readings in the Bundestag and approval from the Bundesrat. No formal bill has been introduced yet, but the government's signal suggests the exemption's days are numbered. The earliest possible effective date mentioned is January 1, 2027.
Investors and tax advisors will be watching the legislative calendar closely. A concrete draft bill is expected later this year.
