Germany Proposes Flat Tax on Crypto Gains Starting in 2027
- A draft bill suggests a flat 25% tax on crypto gains, effective January 1, 2027.
- The tax would apply only to assets purchased from that date onwards, with earlier holdings remaining under current rules.
- Banks and platforms would start withholding the tax automatically from January 2028.
- Gains are treated like dividends with an effective rate of 26.375% before church tax, including a solidarity surcharge of 5.5%.
- Revenue is projected to be €160 million in 2028, rising to €350 million by 2031.
The proposed legislation aims to standardize the taxation of crypto assets as private capital investments, aligning them with other financial instruments like dividends and interest. This change is intended to address perceived unfairness in the current system where profits from crypto speculation remain largely untaxed.
The draft bill could significantly impact long-term investors by eliminating the existing one-year holding period exemption for tax-free gains on assets like Bitcoin. The proposal reflects Germany’s broader strategy to integrate cryptocurrency into its fiscal framework while ensuring fair taxation across different forms of income.<(Source)
