Germany’s 2027 Budget Targets the Crypto Tax Exemption

The German government has placed crypto taxation on its savings list for the 2027 federal budget. The move could end the crypto tax exemption that investors currently earn after a one-year holding period.

The Federal Ministry of Finance detailed the plan in its monthly report. An adjustment of cryptocurrency taxation for 2027 appears among the consolidation measures agreed by the governing coalition.

Crypto Taxes Join Germany’s Budget Consolidation List

The cabinet approved the key figures for the 2027 budget. The Ministry set a spending frame of €543.3 billion, with net borrowing of €110.8 billion.

Consolidation carries much of the load. The coalition agreed on structural savings of roughly €4 billion per year, alongside a package of revenue measures. That package includes new plastic and sugar levies, higher alcohol and tobacco taxes, a tougher fight against tax crime, and a change to how cryptocurrencies are taxed.

Why the Crypto Tax Exemption Is Under Pressure

German law treats crypto as a private asset under Section 23 of the Income Tax Act. Gains become tax-free once coins have been held for more than 12 months. Sales within a year face personal income tax rates of up to 45%, while total annual gains below €1,000 stay untaxed.

Calls to scrap the rule have grown louder since late 2025.

“in future, capital gains should be taxed uniformly regardless of the holding period,” The SPD’s Seeheimer Kreis demanded in a position paper, cited by the Bitcoin Bundesverband.

Industry voices pushed back hard. Bundesverband board member Matthias Steger warned that taxing every disposal would turn each everyday payment into a tax event and push firms to friendlier countries such as Portugal.

Parliament has resisted similar moves before. In May 2026, the Bundestag Finance Committee rejected a comparable bid by the Green Party to abolish the exemption.

A Signal for the Rest of the EU

Germany is not the only EU country with such a rule, but it is close. Portugal is the sole other member state that fully exempts crypto gains after a one-year holding period. Austria, by contrast, scrapped its holding period in 2022 and now taxes new holdings at a flat 27.5%.

The stakes reach beyond national borders. As the EU’s largest economy and its leader in MiCA license approvals, Germany often sets the template that other member states follow.

That influence matters now more than ever. Because one in four European investors has invested in cryptocurrency, and new tax reporting rules under CARF and DAC8 are already in force. If Germany exits the exemption, it could reshape the debate in Brussels and beyond.

Whether the rule survives should become clearer once the Bundestag takes over the draft. A regime that made Germany one of Europe’s friendliest places to hold Bitcoin (BTC) long term now depends on how much revenue lawmakers believe they can raise from it.