German Finance Ministry Proposes 25% Crypto Tax Starting 2028
The German Federal Ministry of Finance has drafted a proposal to impose a flat 25% tax on profits from cryptocurrency trading starting in 2028. This tax would apply to crypto assets acquired after January 1, 2027, while digital assets purchased before this date would benefit from grandfathered tax protections under the old rules. This move indicates the government's aim to boost tax revenues and reform the current favorable tax treatment for long-term crypto holders.
Key Aspects of the Proposal
According to Die Welt, the draft aims to apply a standard 25% flat tax rate to cryptocurrency trading profits from assets acquired after January 1, 2027.
Digital assets bought before this date would retain the existing tax treatment under a grandfathering clause.
Background and Reactions
Currently, in Germany, crypto profits are tax-free if held for more than 12 months, making it attractive for long-term holders.
Finance Minister Lars Klingbeil revealed that the tax reform is expected to generate approximately 2 billion euros in additional state revenue.
Cointelegraph has sought further details from the German Finance Ministry regarding the draft legislation.
Why it matters
The proposed change in tax treatment for crypto assets marks a significant shift in Germany's fiscal policy. It aims to remove the current tax exemption for long-term holders and increase government revenues amid growing interest in digital currencies. Implementing a fixed 25% tax on new acquisitions after 2027 could alter investor strategies and impact the cryptocurrency market within Germany.
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