How is Bitcoin taxed in Germany, and what changes if the holding period (Haltefrist) goes away? We get asked this all the time right now, by friends and on X. Since the summer, the Bundestag has been dealing with it too. We, Tobi and Henry, save in Bitcoin ourselves, so we pulled everything together: the rules that apply today, the new reporting obligations, what’s in the Finance Ministry’s draft and what it would mean for you.
First things first: we’re not tax advisors, and this isn’t tax or legal advice. It’s a carefully researched overview, and it’s only about German tax law. For your own situation, talk to a tax advisor, ideally one who knows Bitcoin.
Where things stand (20 October 2026)
- Today’s law applies. In Germany, Bitcoin gains are tax-free once you’ve held for more than a year.
- The Finance Ministry’s draft is out. Since 30 September 2026 there has been a ministerial draft bill (Referentenentwurf) for an “Act to reform the taxation of certain crypto-assets held as private assets”. It would abolish the holding period for purchases from 2027 onwards.
- The cabinet hasn’t decided yet. The draft was scheduled for 14 October, but the draft isn’t on the list of results from that meeting. According to the ministry, the ministries are still coordinating among themselves. No new date is known.
- The Greens’ bill has been rejected. On 8 October the Bundestag voted it down by 132 votes to 445. That’s no reason to relax, because the ministry’s draft has the same goal.
- The petition to keep the holding period has been heard. 44,439 people co-signed petition 201716, and on 12 October the Petitions Committee (Petitionsausschuss) discussed it in public. Its recommendation is still pending.
After the cabinet, the Bundestag and Bundesrat would still have to approve it. Whether the planned cut-off date of 31 December 2026 can hold is open. We’ll update this article as soon as something happens.
How Bitcoin is taxed today
For tax purposes in Germany, Bitcoin is an “other asset” (anderes Wirtschaftsgut) under § 23 EStG, just like gold or art and unlike shares. The Federal Fiscal Court (Bundesfinanzhof) confirmed this in 2023. That leads to these rules:
- Buying and holding isn’t a taxable event. As long as you don’t sell, nothing happens tax-wise, no matter how far the price rises.
- Selling after more than 12 months is tax-free. That’s the holding period, and it applies however large the gain is.
- Selling within 12 months is a private sale transaction (privates Veräußerungsgeschäft). The gain is taxed at your personal income tax rate. There’s an exemption limit (Freigrenze) of €1,000 per year, and it really is an exemption limit, not an allowance (Freibetrag): gains below €1,000 stay tax-free. If your private sale gains come to €1,000 or more, the whole amount is taxable.
- Paying and swapping count as selling too. If you pay for a hoodie with Bitcoin or swap Bitcoin for another cryptocurrency, that’s a sale for tax purposes. Within the one-year window, it can be taxable.
- Order: When you sell part of your holdings, FIFO (first in, first out) usually applies, so your oldest coins count as sold first. You can look at this separately for each wallet.
- Losses from sales within the one-year window can be offset against gains from private sale transactions, including carrying them back to the previous year or forward to later years.
- Staking and lending: The income from them counts as other income (sonstige Einkünfte) with an exemption limit of €256 per year. The ten-year holding period that was once discussed for such coins is off the table. It stays at one year.
The details are set out in the Finance Ministry’s guidance letter (BMF-Schreiben) on the income tax treatment of crypto-assets, last updated in March 2025, including expanded documentation and cooperation obligations.
Since 2026, your exchange data is being collected
Separately from the holding period, the EU directive DAC8 has applied since 1 January 2026, implemented in Germany by the Crypto-Asset Tax Transparency Act (Kryptowerte-Steuertransparenzgesetz). It follows the OECD standard CARF. Since then, crypto exchanges and other providers record their customers’ transactions and report them to the tax authorities, and the data is also exchanged between countries. The first report, covering 2026, is due by 31 July 2027.
So whatever you buy and sell through exchanges, the German tax office (Finanzamt) will see from now on. If you haven’t declared gains within the one-year window in the past, it’s best to sort that out with a tax advisor. The reporting obligation doesn’t change the tax exemption after one year.
What the ministerial draft says
The draft is an official document, but it isn’t law yet. These are the key points:
- Cut-off date 31 December 2026. Whatever you buy until then keeps today’s rule. These existing holdings stay tax-free after one year, even if you don’t sell them until 2028 or later.
- Purchases from 1 January 2027 would be classed as income from capital assets under § 20 EStG. Gains would then be taxed at 25% flat-rate withholding tax (Abgeltungsteuer) plus the solidarity surcharge (Soli), 26.375% in effect, no matter how long you hold.
- In return, losses on crypto-assets could be offset against gains on shares and other securities, and the saver’s allowance (Sparer-Pauschbetrag) of €1,000 would also apply to crypto gains.
- From 2028, exchanges and banks would withhold the tax directly when you sell.
- Swapping costs you the grandfathering. If you swap a coin bought before the cut-off date for another cryptocurrency afterwards, you acquire a new crypto-asset, and that falls under the new law.
- Self-custody: If the provider doesn’t know your original purchase price, for example because you hold your own keys and later send the Bitcoin to an exchange, it should in principle be able to use the figures you give it. If that isn’t possible or your figures aren’t accepted, it’s initially assumed that the crypto-assets were bought after the cut-off date. For the tax deduction, a flat 50 percent of the sale proceeds is then used as the basis. That affects what the provider withholds, not necessarily your final tax. Without proof of when you bought and what you paid, though, the grandfathering isn’t worth much.
Who wants what?
- SPD and Finance Ministry: On 6 July 2026 the cabinet adopted the government draft of the 2027 federal budget. It states the intention to class crypto-assets held as private assets as income from capital assets. Finance Minister Lars Klingbeil has presented the ministerial draft to do exactly that.
- Greens: Their own bill (Drucksache 21/5752) aimed to scrap the holding period and tax gains at the personal income tax rate. The Bundestag rejected it on 8 October 2026. The Finance Committee’s report (Drucksache 21/6112) also notes, however, that the SPD wants to abolish the holding period and make gains subject to the flat-rate withholding tax.
- Die Linke: In committee, the Left Party backed the Greens’ bill. It also tabled its own motion: “Strictly regulate crypto-assets and tax them fairly” (Drucksache 21/5824).
- CDU/CSU: The Union rejected the Greens’ bill, arguing among other things that crypto-assets would then be taxed differently from precious metals. Abolition isn’t in the coalition agreement. How the Union will position itself on the ministry’s draft as the process goes on is open.
- AfD: It also voted against, arguing that the state should tax less instead of looking for new sources of tax.
- FDP: No longer in the Bundestag, but campaigning to keep the holding period.
The Bitcoin community started a Bundestag petition to keep the holding period. How it went and what was said at the hearing is in our article Bitcoin holding period: the petition, the hearing and what you can do now.
What it would cost you
An example: a €10,000 gain on Bitcoin that you buy after 31 December 2026 and hold for more than a year.
- Today’s law: €0 in tax.
- Flat-rate withholding tax, as in the ministerial draft: 25% plus Soli, 26.375% in effect, so around €2,640 if your saver’s allowance is already used up by interest or dividends. If it’s still unused, it’s around €2,370. More with church tax.
- Personal income tax rate, as in the Greens’ rejected bill: 14 to 45% depending on income. At 42% it would be €4,200, and depending on income, Soli and church tax would come on top.
Then there’s the effort: every sale would matter for tax, however long you’d held. With German providers, the tax is meant to be withheld directly from 2028. But if you self-custody, buy through foreign exchanges or pay with Bitcoin, you’d have to do the maths and declare it yourself, with FIFO across all wallets and years.
Would a change apply retroactively?
True retroactivity for holdings bought under current law would be constitutionally tricky (protection of legitimate expectations, Art. 20 Abs. 3 GG). That’s why the ministerial draft works with a cut-off date: whatever is bought after 31 December 2026 falls under the new law, and older holdings keep the one-year rule. That isn’t guaranteed, since the cabinet, Bundestag and Bundesrat can move the cut-off date. And in practice, the grandfathering depends on you being able to prove when you bought and what you paid.
What we criticise about this draft
This section is our opinion, deliberately kept separate from the facts above.
Gold stays, Bitcoin is pushed out
Today, Bitcoin, gold, art and collectibles are treated the same for tax purposes, all as an “other asset” under § 23 EStG. The ministerial draft only touches crypto-assets. As we read it, gold is left alone. The core justification is that crypto-assets have established themselves as an investment. Whether that’s a sufficient objective reason for treating them differently will probably be decided by the courts in the end. We’re not lawyers, and we’re not claiming the draft is unconstitutional. But we wouldn’t be surprised if the question gets asked. The Union’s argument against the Greens’ bill, that crypto-assets would then be taxed differently from precious metals, applies just as much to the ministry’s draft.
At the Petitions Committee hearing on 12 October, that question was asked by tax advisor Ingo Heuel, who accompanied the petitioner. Anyone who wants to stuff crypto-assets into income from capital assets, he said, has to explain why they don’t stuff gold in there as well. In our translation: “So far, at least, I don’t find that explanation in the draft bill.” We didn’t hear any reason in the session why gold should be treated differently from Bitcoin. The ministry pointed out that crypto-assets are closer to capital investments. A ministry representative admitted it was “quite difficult” to take the holding period away from crypto-assets alone. As an alternative, he mentioned abolishing the holding period in that section for all assets, gold included.
As a means of payment, Bitcoin would be finished for new holdings
Paying is a sale for tax purposes. Today it stays tax-free if the coins were held for more than a year. For purchases after the cut-off date, every payment would be taxable, no matter how long you’d had the coins. If you pay for your coffee with sats bought after 2026, you’d have to document and declare every single transaction. The saver’s allowance would cushion small gains, but you’d still have to do the maths and keep the records. For everything bought after the cut-off date, Bitcoin would be practically unusable as a means of payment in Germany.
The draft makes short-term trading cheaper, of all things
Today, if you trade within a year, you pay your personal income tax rate on the gain, up to 45 percent depending on income. Under the draft it would be 26.375 percent. For everyone whose personal tax rate is above 26.375 percent, and that’s already the case at middle incomes, short-term trading would get cheaper than today and holding for the long term more expensive. Whether that’s intended isn’t stated in the draft. Petitioner Nicole Nowak raised exactly this point at the hearing.
The sum at stake
The ministry puts a figure on the expected revenue in the draft itself, for federal, state and local government combined:
- 2027: zero euros
- 2028: €160 million, of which €75 million for the federal government
- 2029: €305 million
- 2030: €325 million
- 2031: €350 million, of which €160 million for the federal government
For comparison, based on the government draft: the federal core budget for 2027 plans spending of €555.4 billion and net borrowing of €118.7 billion. Including the borrowing of the special funds for infrastructure and the Bundeswehr, the federal government plans around €204 billion in new debt for this one year. It budgets €41.9 billion for interest in 2027, and the financial plan has €55.2 billion for 2028, around €151 million a day.
The €75 million the federal government is meant to get from the reform in 2028 is roughly half a day’s interest. What the switch costs citizens, providers and tax offices appears in the draft only as “to follow” and isn’t quantified. Both sides of the sum are planned figures, and the 2027 federal budget isn’t due to be adopted until the end of November.
Our assessment, even if it’s uncomfortable
We don’t think the holding period can be saved for new purchases. The petition reached its quorum the day after it went live, 44,439 people co-signed, and the Petitions Committee discussed it in public. So far, none of that has changed the ministry’s course. We don’t read the draft missing the cabinet on 14 October as a change of course. The reason given was the ongoing coordination between the ministries.
What’s negotiable are the details, and those are worth debating: the cut-off date, how far the grandfathering reaches and the flat 50 percent rule when the purchase price can’t be traced.
What bothers us most is something else. If a draft lets tax be withheld at a flat rate first whenever someone can’t produce receipts for purchases from ten years ago, it pushes people out of the regulated system instead of into it. Some will probably leave Germany, and their future taxes here go with them. Others will buy without identity checks from now on, and their gains are still taxable. Nobody wins, and the draft’s revenue estimate doesn’t say a word about it.
What you can do now
- Keep clean records. Purchase date, purchase price, exchange or wallet and all sales. However the debate ends, a complete history is worth its weight in gold now that the new reporting rules are in place. Tools like CoinTracking or Blockpit do the FIFO calculation for you.
- Stay informed. The draft is still being coordinated between the ministries. We’ll update this article as soon as the cabinet has decided.
- Talk to your MPs if the holding period matters to you. The petition is closed. What still makes a difference in the rest of the process is direct contact with your members of the Bundestag. More on that in our article on the holding period petition.
- Don’t make panic decisions. The old law still applies. Selling out of fear of a law that doesn’t exist yet is rarely a good idea, and it would be the opposite of low time preference.
Timeline
- 6 July 2026: The cabinet adopts the government draft of the 2027 federal budget, including the intention to abolish the holding period for crypto-assets.
- 4 and 5 August 2026: Petition 201716 goes live and reaches the quorum of 30,000 co-signatures the next day.
- 15 September 2026: Signing closes with 44,439 supporters.
- 30 September 2026: The Finance Ministry sends the ministerial draft to the associations.
- 8 October 2026: The Bundestag rejects the Greens’ bill.
- 12 October 2026: Public discussion of the petition in the Petitions Committee.
- 14 October 2026: The planned cabinet discussion doesn’t take place.
FAQ: Bitcoin and taxes in Germany
Are Bitcoin gains tax-free in Germany?
Yes, if you’ve held for more than 12 months. Gains from sales after the holding period has run out are tax-free under § 23 EStG, whatever the amount. If you sell within 12 months, your personal income tax rate applies, with an exemption limit of €1,000 per year.
How much tax do I pay on Bitcoin gains within a year?
Your personal income tax rate, 14 to 45 percent depending on income, plus Soli and church tax where applicable. If all your private sale gains for the year stay below €1,000, they’re tax-free.
Do I have to put Bitcoin on my tax return if I only hold?
No. Buying and holding isn’t a taxable event. Only a sale, swap or payment within the one-year window can be taxable, and then it goes on the form for other income (Anlage SO).
Is paying with Bitcoin taxable?
Paying counts as a sale for tax purposes. If you’ve held the coins for more than 12 months, it stays tax-free. Within the one-year window, a taxable gain can arise. Under the ministerial draft, every payment would be taxable for purchases after 31 December 2026, however long you’d held.
Is the Bitcoin holding period being abolished?
Not yet. Since 30 September 2026 there has been a ministerial draft that would abolish it for purchases from 2027. The cabinet discussion on 14 October 2026 didn’t take place. After a cabinet decision, the Bundestag and Bundesrat would still have to approve it. Until a law is in force, the one-year holding period applies unchanged.
What would the ministerial draft change?
Crypto-assets bought after 31 December 2026 would be classed as income from capital assets. Gains would then be taxed at 25 percent plus Soli, 26.375 percent in effect, no matter how long you hold. Existing holdings keep the one-year rule. From 2028, providers would withhold the tax directly.
What happens if my exchange doesn’t know my purchase price?
Under the draft, the provider should in principle be able to use your figures. If that isn’t possible, a purchase after the cut-off date is initially assumed, and a flat 50 percent of the sale proceeds is used for the tax deduction. That affects the deduction, not necessarily your final tax. If you self-custody, you should be able to document when you bought and what you paid without any gaps.
Why should Bitcoin be treated differently from gold?
Today, Bitcoin and gold both count as an other asset under § 23 EStG. The draft only touches crypto-assets and justifies this by saying they have become established as an investment. Whether that’s a sufficient objective reason is open.
How much is the reform supposed to bring in?
According to the draft, for federal, state and local government combined: zero euros in 2027, 160 million in 2028 (75 million of it for the federal government), 305 million in 2029, 325 million in 2030 and 350 million euros in 2031. For comparison, the federal financial plan has €55.2 billion in interest for 2028, around €151 million a day.
Does my exchange report data to the tax office?
Yes. Since 1 January 2026, crypto providers record their customers’ transactions under the EU directive DAC8 and report them to the tax authorities, for the first time by 31 July 2027 for the year 2026. That makes keeping your own clean records more important than ever.
Is there a longer holding period for staked or lent coins?
No, it stays at 12 months. The income from staking or lending itself is other income with an exemption limit of €256 per year.
Can a new Bitcoin tax apply retroactively?
The draft works with a cut-off date instead of retroactivity: the new law would apply to crypto-assets bought after 31 December 2026. That isn’t binding yet, and the cut-off date may change during the process.
What’s the difference between an exemption limit and an allowance?
With an allowance (Freibetrag), only the part above the threshold is taxable. With the €1,000 exemption limit (Freigrenze) for private sale transactions, the whole gain becomes taxable as soon as the limit is reached.
Our take
For long-term Bitcoin savers, today’s law in Germany is one of the best in the world: hold for a year, sell tax-free. Whether it stays that way will be decided first in the cabinet and then in the Bundestag and Bundesrat. Until then: keep clean records, stay informed, don’t act in a panic, and if the holding period matters to you, talk to your MPs while the debate is still going on.
Keep stacking sats, Tobi & Henry
P.S.: How the petition to keep the holding period went is in our article Bitcoin holding period: the petition, the hearing and what you can do now.
Bitcoin21 is a clothing shop from Hamburg. We write about tax because, as Bitcoin savers, it affects us too. What we actually sell is clothing for Bitcoiners, for example our Bitcoin Basic T-Shirt or the Bitcoin Hoodie Oversized.
