Germany Considers Canceling 1-Year Tax-Free Holding Period for Cryptocurrencies, Aiming for $2.3 Billion in Additional Tax Revenue by 2027
German Finance Minister Lars Klingbeil proposed a reform plan for the 2027 federal budget, which will eliminate the current capital gains tax exemption for holding crypto assets for over one year.
The new regulation aims to treat crypto assets the same as stocks and funds, taxing them at a 25% capital gains tax rate (plus solidarity surcharge) regardless of the holding period.
This move is intended to increase tax revenue and combat financial crime, with an expected additional contribution of about €2 billion (approximately $2.3 billion) to the budget by 2027.
Source: Public Information
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Lars Klingbeil, as Germany's Vice Chancellor and Finance Minister, has previously pushed within the SPD to eliminate the tax exemption for crypto holding periods. He attempted similar reforms during the 2025 budget discussions but was unsuccessful. This time, he has embedded it into the 2027 "Eckwertebeschluss" overall deficit reduction plan, increasing the likelihood of passage.
On the capital front, the German government aims to convert the portion of crypto capital that would have flowed into long-term HODL into immediate tax revenue through a unified tax system. This funding will be used to fill the €98 billion budget gap, while also guiding private capital from crypto speculation towards regulated financial assets or overseas migration, shifting resources from "tax incentive competition" to "fair taxation and compliance enforcement."
Similar to Austria, which has implemented capital gains tax without a holding period distinction for crypto, and countries like France and the UK that are gradually tightening crypto tax incentives, Germany's crypto market is currently transitioning from a European tax haven to a standard regulatory framework.
Essentially, this represents a regulatory change: by eliminating the "holding period privilege," the pricing power shifts from investors to the state treasury. The mechanism aims to correct tax inequalities between crypto and traditional assets, reduce shadow financial risks, and allow capital to flow more efficiently from private long-term holdings to public budget redistribution under fiscal pressure.
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The more attractive the tax incentives, the sooner the government will turn them into a money-printing machine.
Long-term holding is not a tax haven but a temporary privilege that can be changed at any time by policy.
Capital always flows to lower taxes, and the government always reaches into the money bag; structure determines victory.