Crypto Tax: Germany’s Tax-Free Status at Risk
Big changes could be on the horizon for crypto taxes in Germany. The Social Democratic Party (SPD) is proposing a significant overhaul, aiming to scrap the current rule that lets you sell crypto tax-free after holding it for a year. Instead, they want to apply a flat 30% capital income tax to all profits from crypto, regardless of how long you’ve held it.
This potential shift comes from published documents outlining coalition negotiations between the SPD, the Christian Democratic Union (CDU), and the Christian Social Union (CSU).
When it comes to taxing capital income, the SPD stated their position clearly: “We are increasing the withholding tax rate on private capital income to 30 percent. We are taxing income from cryptocurrencies as capital income.”
Crypto education platform Blocktrainer suggests this means we could be looking at “a planned flat-rate tax of 30% on all crypto profits,” no matter how long you’ve been holding your crypto.
They even argue that this tax change “would de facto make bitcoin unusable as a means of payment in Germany.”
Read more: Ukraine to tax crypto like securities when it becomes legal next year
Currently in Germany, there’s a bit of a grace period for crypto. If you sell within 12 months of buying, profits are subject to income tax. But, if you hold onto your crypto for longer than a year, any gains are completely tax-free.
There are also some smaller exemptions in place right now. Crypto profits under €1,000 (around $1,080) are tax-free, and any other crypto gains or income are taxed at your individual income tax rate, which can be between 0% and 45%.
Blocktrainer highlights that these discussions are still ongoing, and the CDU and CSU parties aren’t keen on the crypto tax changes the SPD is proposing, so nothing is set in stone yet.
It’s worth noting that the CDU and CSU won the majority of seats in Germany’s February 28 election, with the far-right Alternative for Germany party coming second and the SPD coming in third.
Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.
