Germany's Finance Committee on Thursday voted down a Green Party proposal that would have ended the tax exemption for crypto assets held longer than one year. The defeat means the current rule — Bitcoin and other cryptocurrencies are free from capital gains tax if held for more than 12 months — stays in place for now. But the fight over crypto taxation is far from over: Finance Minister Lars Klingbeil has signaled his own plan.
What the Greens proposed
The Greens wanted to scrap the one-year holding exemption for all digital currencies. Their argument: the rule was designed for physical assets like antiques, not for assets that can be traded at the click of a button. They said the tax break lets a huge chunk of crypto profits slide — a claim backed by a study from the Frankfurt School Blockchain Center.
That study estimated German crypto investors realized €47.3 billion in gains in 2024, with nearly two-thirds of that escaping tax under the holding-period rule. Ending the exemption, the Greens argued, could bring in up to €11.4 billion in additional annual tax revenue.
How the parties lined up
The vote broke along predictable lines. The CDU/CSU opposed the measure on fairness grounds, saying it would create a new inconsistency in the tax code without solving any broader problem. The AfD rejected it on fiscal principle: Germany should be reducing the scope of taxation, not expanding it.
The SPD took a softer stance. While the party supports taxing crypto in theory, it's waiting for Klingbeil's own proposals before committing to any specific change. Only Die Linke backed the Greens — but even then, with reservations. The Left Party flagged serious administrative complexity and noted the proposal had no cap on loss offsets from crypto trades, which could drain revenue.
The revenue projection that wasn't enough
The €11.4 billion figure from the Frankfurt School study was the Greens' headline number. But it didn't sway the committee. Opponents questioned whether the estimate was realistic, especially given how hard it is to track decentralized transactions. The study itself acknowledged that enforcement would require new data-sharing infrastructure — much of which is already coming under the EU's MiCA framework, set to take effect in 2026.
With the bill dead, Germany's one-year rule stays. That's a relief for long-term holders who'd been watching the debate. But the reporting requirements under MiCA will still force exchanges and wallets to share more data with tax authorities.
What comes next
Finance Minister Lars Klingbeil has his own tax proposals in the works. He hasn't detailed them yet, but the committee's vote this week doesn't close the door — it just kicks the can. Klingbeil could end up proposing something narrower than the Greens' full repeal, or he could surprise everyone.
The question now is whether he'll pick up the debate before the new MiCA rules land, or wait until they're already in place. Either way, the one-year clock isn't ticking on this issue.
