Germany's 25 percent crypto tax is a tax cut for anyone who trades

Every headline says Germany is about to tax crypto. For the people who actually trade it, the draft is a tax cut.

The finance ministry has written a bill taxing crypto gains at a flat 25 percent regardless of how long the asset was held, effective 1 January 2027 and only on assets bought from that date. Welt reported it first on 8 September 2026, working from a departmental draft dated mid-August, and Handelsblatt has since seen the document.

Here is the arithmetic the coverage skipped. A German who sells inside twelve months pays ordinary income tax today, up to 42 percent for higher earners. Under the draft they pay the flat rate plus a solidarity surcharge worth 5.5 percent of the tax, which lands at 26.375 percent before church tax.

For an active trader in the top bracket, that is a cut of more than fifteen points.

The bill everyone is describing as a tax rise is a rise only for patient people

It raises tax only for those who buy and wait, and only on coins bought after New Year 2027. Anything already sitting in a German wallet keeps the current rules, twelve-month exemption included.

That grandfathering deserves a moment of your attention. From 2027 Germany will have two crypto stocks sitting side by side. An old one that can be sold tax-free after a year, and a new one taxed at 26.375 percent forever.

If you held both, which would you sell?

The old one, obviously, every time, until the tax-free pile is gone. Which probably means the revenue arrives later and smaller than any straight-line model suggests (tax offices are not usually surprised by this, and they are usually surprised by this).

The ministry's own forecast is already modest

It expects 160 million euros in 2028, rising to 350 million by 2030 on Handelsblatt's account of the draft, though Decrypt's reading of the same document puts the larger figure at 2031.

So do the division. At an effective 26.375 percent, 350 million euros of tax implies roughly 1.3 billion euros of realised gains a year, across a country of 84 million people. Germany is rebuilding the tax treatment of an entire asset class to reach a pot roughly that size.

The justification is fair on its own terms

"Kryptowerte stellen zunehmend eine Form der privaten Kapitalanlage dar," the draft says: crypto assets increasingly represent a form of private capital investment. The change ends their special status against other capital income, such as dealing in shares.

A line from the ministry puts it harder. "Es ist ungerecht, wenn hart erarbeitete Einkommen und Kapitalerträge besteuert werden, Gewinne aus Spekulationen mit Kryptowerten aber weitgehend steuerfrei bleiben." Unfair, in other words, that hard-earned income is taxed while speculative crypto profits largely are not.

BTC-ECHO asked the ministry directly and got confirmation that the work is real with the details still open. "Kern der Neuregelung soll sein, dass Gewinne aus der Veräußerung von Kryptowerten gleich behandelt werden mit Gewinnen aus der Veräußerung von Wertpapieren wie Aktien," a spokesperson said, meaning equal treatment with securities.

On whether the rule applies only to assets bought after 1 January 2027, the ministry declined to say, citing coordination inside the government. Which is, as it happens, the one question every German holder is currently asking.

The rest of the design is unremarkable, and in places generous

The 1,000-euro saver's allowance applies. Losses offset gains, including gains on shares, which is a real improvement on the current mess. Staking and lending income becomes capital income. NFTs, security tokens, some stablecoins and some real-world-asset tokens stay outside the regime altogether.

Automatic withholding by banks and platforms does not start until 2028, giving them a year to build the systems. And where a customer cannot produce a purchase price and an acquisition date, the flat rate applies regardless.

Our reading is that this passes in something close to its present shape, because the Union and SPD already agreed to tax crypto during summer budget talks, and because a flat rate is probably the least painful version available to them. We would expect German exchange volumes to jump in the last quarter of 2026 as buyers rush to get inside the grandfather window, and we would expect the ministry to miss its 2028 revenue estimate on the low side.

A final bill that taxes existing holdings as well would break both of those calls. It would also be a political fight of an entirely different size.