Germany Moves to Scrap Crypto Tax Break in 2027

The 12-month exemption is under pressure in the 2027 budget. That could make Germany less attractive for long-term investors, while MiCAR and DAC8 have already tightened oversight.

Key Takeaways

• Germany is putting the 12-month crypto tax exemption on the chopping block for the federal 2027 budget.
• Under the current rules, crypto gains are tax-free after a 12-month holding period; selling within a year can trigger taxes of up to 45%.
• Removing the exemption could make Germany less attractive for long-term investors and reignite the European debate over crypto taxes.

Germany is preparing to revisit one of its most crypto-friendly tax rules in the federal 2027 budget. The current exemption for gains on crypto held for 12 months or longer is now under pressure, even though it has helped make Germany one of Europe’s more appealing markets for long-term investors.

Budget Looks for More Room

The Federal Ministry of Finance outlined the plan in its monthly report. The cabinet has already signed off on the broad framework for the 2027 budget, which includes €543.3 billion in spending and a net financing requirement of €110.8 billion.

To help close the gap, the coalition is banking on structural savings of around €4 billion a year, plus additional revenue measures. Alongside higher excise taxes on alcohol and tobacco, new levies on plastic and sugar, and a tougher push against tax fraud, changes to crypto taxation are also part of the package.

What Changes Now

Under current German law, crypto is treated as private property under Section 23 of the Income Tax Act. That means gains are tax-free if the assets are held for more than 12 months. If they are sold sooner, profits can be taxed at the individual rate, which can reach as high as 45%. Annual gains below €1,000 are also exempt.

Talk of ending that exemption is not new. Pressure to scrap the rule has grown since late 2025, although the Bundestag Finance Committee turned down a similar proposal from the Greens in May 2026. Germany’s crypto industry is pushing back again. According to the Bitcoin Bundesverband, taxing every sale would also make everyday payments taxable and could drive businesses toward more crypto-friendly countries such as Portugal.

What It Means for Europe

For crypto investors across Europe, the key point is that Germany is not moving in a vacuum. Portugal is now the only other EU country that fully exempts crypto gains after a one-year holding period, while Austria ended that exemption in 2022 and now applies a flat 27.5% tax rate.

At the same time, German crypto regulation has become stricter in recent years under MiCAR and DAC8, both of which have already increased reporting and oversight requirements. If the exemption is removed, it could reopen the crypto tax debate in Brussels and across other member states, especially as tax transparency continues to expand throughout Europe.