Germany Crypto Holding Period: Cabinet Delay Leaves 2027 Tax Plan Open

Germany’s tax-free crypto rule is still in force at the end of October 2026, but only just. The Finance Ministry wants to scrap the one-year holding period for coins bought from 1 January 2027 and tax those gains at the 25 percent flat rate on capital income, yet the federal cabinet let its planned 14 October decision date pass without adopting the draft, and the ministry says inter-ministerial talks are still running with no new date. For anyone holding Bitcoin or Ether in Germany, the date that matters is still 31 December 2026.

Nothing has changed in law yet. Gains on crypto held for more than a year remain tax-free under Section 23 of the Income Tax Act (EStG). What follows is where the plan stands, who it would hit, and what holders can sensibly do in the nine weeks left in the year.

A Skipped Cabinet Date and a Ministry That Will Not Commit

The Federal Ministry of Finance (BMF) sent its draft, titled an act to reform the taxation of certain crypto assets held as private assets, to industry associations on 30 September and gave them until 6 October to comment. Former FDP MP Frank Schäffler attacked the six-day window, and the Federal Chamber of Tax Advisers doubted comments could be reviewed properly in time, according to CryptoTicker.

Two days before the planned cabinet decision, on 12 October, the Bundestag’s Petitions Committee held a public session on a petition to keep the holding period. The petitioner, Nicole Nowak, had gathered 44,439 co-signatures. A ministry official told the committee the BMF wants a legally secure classification and fair taxation of crypto assets, then added that the outcome “bleibt in der Sache abzuwarten”, which roughly means it remains to be seen. The proposal is still in Ressortabstimmung, the review between ministries that must finish before cabinet can act.

On 14 October the item did not appear in the published results of the cabinet’s session. BTC-ECHO reported that at least twelve Bundestag members had criticised the abolition, some from the CDU/CSU, which governs with the SPD. CryptoTicker’s tracker, last updated on 25 October, still showed no new cabinet date.

This is a separate fight from the Greens’ own bill to end tax-free crypto gains, which the Bundestag rejected by 445 votes to 132 on 8 October (Drucksache 21/5752). The government’s own plan traces back to the 2027 budget draft the cabinet approved on 6 July 2026, which already counted on a change to crypto taxation.

Current Law vs the Finance Ministry Draft

The draft moves privately held crypto out of Section 23 EStG, which covers private sales of “other assets”, and into Section 20 EStG, the rule for interest, dividends and share gains. That one reclassification drives every other change.

Sources for the table: Section 23 EStG, Section 32d EStG for the 25 percent rate, and reporting on the draft by CryptoTicker and CoinTracking. Data as of October 2026.

Church tax runs at 8 percent of the income tax in Bavaria and Baden-Württemberg and 9 percent elsewhere. Because it is deductible under the flat-tax formula, the combined rate for church members works out at roughly 27.8 to 28 percent, which explains the “28 percent” headlines.

Who the 31 December 2026 Cut-Off Hits Hardest

Grandfathering attaches to the date a coin was acquired, not the date it is sold. A Bitcoin bought in 2021 and sold in 2035 would still be tax-free. One bought on 2 January 2027 would never be.

• Long-term savers who keep buying: anyone running a monthly crypto savings plan ends up with two pools of coins taxed under two regimes, and every sale has to show which pool it came from.
• Short-term traders in high brackets: they could pay less. A trader taxed at 42 percent on gains inside a year would drop to 26.375 percent.
• Stakers and lenders: rewards received from 2027 fall under the new rules even when the underlying coins were bought years ago.
• People paid in crypto: tax adviser Ingo Heuel warned that bitcoin received as salary could be taxed once as wages and again on sale, because the draft does not use the salary value as the cost basis, CryptoTicker reported.
• Holders with patchy records: coins from defunct exchanges, airdrops and wallet-to-wallet transfers are the hardest to prove, and the draft punishes missing data (more below).

Worked Numbers: The Same 12,000 Euro Gain Under Both Regimes

Take an investor who buys 0.5 BTC for 30,000 euros and later sells for 42,000 euros, a gain of 12,000 euros. Assume a single filer with no other capital income using the saver’s allowance, no church tax, and a 42 percent marginal income tax rate. Figures are before any solidarity surcharge on income tax, which most earners no longer pay.

The small-gain change cuts the other way. Under today’s Freigrenze, a 1,200 euro short-term gain is taxed in full because it crosses 1,000 euros: 504 euros at a 42 percent rate. Under the draft, only 200 euros would be taxable, or 52.75 euros. The catch is that the saver’s allowance is shared with bank interest and dividends, so many savers will already have used part of it.

Exchange Withholding From 2028 and the Missing Cost Basis Problem

The part of the draft that worries tax advisers most is not the rate. From 2028, crypto platforms would deduct the tax at source, as German banks already do for shares. According to CryptoTicker’s reading of the draft, a platform with no euro balance to draw on could sell a customer’s coins to cover the bill without asking.

Where the platform has no acquisition data, for example because the coins arrived from a hardware wallet, the draft would treat 50 percent of the sale proceeds as the gain. Sell coins for 10,000 euros that originally cost 9,500 euros, and the real tax is about 131.88 euros. The substitute rule would withhold 1,318.75 euros, ten times more, leaving the holder to claim the difference back through the annual return. That matches the “up to tenfold” over-deduction one adviser warned about in CryptoTicker’s coverage, and it is why Heuel called the flat rate too high.

Self-custody does not escape the tax. It only escapes the withholding, which means the holder declares the gain personally. Address hygiene still matters either way; our explainer on crypto address whitelisting covers how to lock withdrawals to wallets you control.

What German Crypto Holders Can Do Before Year End

• Export every transaction now: download full histories from each exchange and wallet, with date, quantity, euro cost and venue for every purchase. Store them outside the platform.
• Label pre-2027 lots: mark which holdings were acquired on or before 31 December 2026. If you later sell, you want those to stay in the tax-free pool and not be mixed with new purchases.
• Check lot matching: find out whether your exchange or tax software matches sales first-in, first-out. Under FIFO, a sale draws on the oldest coins first, which decides whether a gain falls under the old rule or the new one.
• Document transfers in: for coins moved to an exchange from a wallet, keep proof of the original purchase so the platform can be given real cost data and the 50 percent fallback is avoided.
• Do not trade on a draft: the cut-off comes from an unapproved document and could move if the timetable slips. Buying before 31 December purely for the tax treatment is a bet on a date nobody has fixed in law.
• Talk to a Steuerberater if you stake, lend or are paid in crypto: these are the areas where the draft is least settled.

The Road From Draft to Law, Step by Step

Dates compiled from the Bundestag, CoinTracking and CryptoTicker.

Moving Crypto Next to Shares Makes Sense, the Rollout Does Not

Germany’s holding period was always an accident of classification. Crypto landed in Section 23 because a 2023 Federal Finance Court ruling classed gains as private sales of an “other asset”, and tax-free after a year followed from that. Putting it next to shares is the tidier answer, and a flat 26.375 percent is not punitive by European standards. India, for comparison, taxes crypto gains at a flat 30 percent with no allowance and adds 1 percent TDS on transfers, as our piece on Form 141 crypto TDS explains.

The trouble is the execution. A six-day consultation, a fallback rule that can over-withhold by a factor of ten, and a double-tax gap for salaried crypto income all suggest a bill written to hit a budget line before it was written to work. The gold point raised in committee is fair too: if crypto is capital income, the ministry owes an explanation for why gold bars stay tax-free after a year.

Our reading of the calendar is that a 1 January 2027 start is getting tight. A bill that has not cleared cabinet by early November still needs three Bundestag readings, committee work and the Bundesrat inside roughly eight weeks. That does not mean the plan is dead. A BTC-ECHO and IU survey of 41 industry experts put the odds of enactment within six months at 65 percent on average. It does mean the 31 December cut-off is the softest number in the draft, and the likeliest outcome of further delay is a later cut-off, not no cut-off. Holders are better served by clean records than by year-end buying.

Coins Bought Before 2027, the €1,000 Exemption and Cabinet Timing

Is the Crypto Holding Period in Germany Abolished?

No. As of late October 2026, gains on crypto held for more than one year remain tax-free under Section 23 EStG. Abolition is proposed in a Finance Ministry draft that the cabinet has not yet adopted.

Will Bitcoin Bought Before 2027 Stay Tax-Free in Germany?

Under the current draft, yes. Coins acquired or received by 31 December 2026 keep the one-year rule however long you hold them. That cut-off could change before the bill is passed.

What Will the Crypto Tax Rate Be in Germany From 2027?

The draft applies the 25 percent flat tax on capital income plus the 5.5 percent solidarity surcharge, 26.375 percent in total, or about 28 percent for church members.

Does the 1,000 Euro Crypto Tax Exemption Still Apply?

Yes, for now. The current 1,000 euro Freigrenze for private sales still applies. The draft would replace it, for new coins, with the 1,000 euro (2,000 euro joint) saver’s allowance shared with interest and dividends.

Will German Exchanges Deduct Crypto Tax Automatically?

The draft plans withholding by crypto service providers from 2028. Until then, holders declare gains in their own tax return.

When Will the Cabinet Decide on the Crypto Tax Bill?

No new date has been announced. The Finance Ministry says coordination between ministries is ongoing after the 14 October date passed without a decision.

More crypto coverage is in our Crypto section, including why stablecoins lose their peg.

Bundestag Records and the EStG Sections on Private Sales

• Deutscher Bundestag, hib 807/2026: Petitions Committee session on the crypto holding period, 12 October 2026
• Deutscher Bundestag, text archive: Petitions Committee public session, week 42
• Deutscher Bundestag, Drucksache 21/5752
• Section 23 EStG, private sales transactions
• Section 20 EStG, income from capital assets
• Section 32d EStG, flat tax rate on capital income
• CryptoTicker: cabinet date passes without a decision (updated 25 October 2026)
• CryptoTicker: Finance Ministry status and draft details (updated 24 October 2026)
• CryptoTicker: draft bill details and timetable
• BTC-ECHO: abolition of the Bitcoin holding period paused for now
• CoinTracking: crypto tax reform and the 2027 budget

This article is for information and education only and is not investment, tax or financial advice. Figures were checked on 30 October 2026; confirm current details with the official source or a registered adviser before acting.