Germany considers ending the Bitcoin tax-free holding rule by 2027, adds DAC8 pressure

Germany is reviewing crypto tax changes that could end the Bitcoin tax-free holding rule by 2027. Finance Minister Lars Klingbeil said in a presentation of the 2027 federal budget that Germany intends to “tax cryptocurrencies differently” to raise roughly €2 billion in additional revenue and improve defenses against financial and tax crime. Under current German rules, private crypto gains are taxed if coins are sold within 12 months. Profits are generally exempt after holding longer than one year, a policy industry groups say has supported Germany’s appeal for long-term investors. The government also extended the one-year “Haltefrist” treatment to tokens used for staking and lending after earlier guidance. Klingbeil did not name the holding-period exemption, but industry groups and a crypto tax professional say the most likely target is the one-year tax break for long-term holders—i.e., the Bitcoin tax-free holding rule. They warn it could make Germany less competitive versus jurisdictions with flatter or lower effective capital-gains taxes, potentially resembling Austria’s 27.5% model and the UK’s top 24% rate. At the same time, Germany is implementing stronger reporting under the EU’s DAC8 Crypto Asset Tax Transparency regime, which began in January and increases transaction-record disclosures. Traders should watch for heightened sell-side pressure from long-term holders if the Bitcoin tax-free holding rule is removed, especially around 2027 policy expectations.