Germany’s Finance Committee has rejected a proposal from the Green Party to scrap the country’s tax exemption for cryptocurrencies held longer than one year.
Summary
- Germany’s Finance Committee rejected a Green Party proposal to end the country’s one-year crypto tax exemption for long-term holders.
- CDU/CSU, AfD, and SPD lawmakers opposed the measure for different reasons, while only Die Linke backed the proposal with reservations.
- Finance Minister Lars Klingbeil has separately signaled plans to revise crypto taxation by 2027 as Germany expands oversight under EU reporting rules.
According to the committee discussions, lawmakers from multiple parties opposed the measure for different reasons, leaving Germany’s existing crypto tax framework intact even as Berlin weighs new digital asset tax rules for 2027.
Under current German law, profits from Bitcoin and other cryptocurrencies remain free from capital gains tax if investors hold the assets for more than 12 months. The rule, commonly referred to as the “Haltefrist,” has helped Germany build a reputation as one of Europe’s more favorable jurisdictions for long-term crypto investors.
The proposal from Bündnis 90/Die Grünen argued that the exemption no longer fits the modern financial market because it was originally designed for physical valuables such as gold, antiques, or foreign currency holdings rather than digital assets. Green lawmakers cited research from the Frankfurt School Blockchain Center estimating that Germany could collect up to 11.4 billion euros, or about $12.9 billion, in additional yearly revenue from crypto taxation.
At the same time, the party used a lower estimate in its own fiscal calculations, saying conservative assumptions would still generate billions in extra state revenue.
Why did German parties reject the crypto tax proposal?
Opposition to the bill extended across much of Germany’s political spectrum. Members of the CDU/CSU argued the proposal would create fresh inconsistencies because cryptocurrencies would end up taxed differently from comparable assets such as precious metals and foreign currencies.
Meanwhile, the AfD criticized the measure from a broader tax policy perspective. Party representatives said Germany should reduce taxation instead of expanding it and argued the government should focus public spending on areas including domestic security, foreign policy, and the judicial system.
The SPD took a more cautious position, saying that while the party supports tighter crypto taxation in principle, it would wait for Finance Minister Lars Klingbeil to present a formal federal proposal before backing specific legislative changes.
Klingbeil had already signaled possible reforms in April while presenting Germany’s 2027 federal budget. During that presentation, the finance minister said the government planned to “tax cryptocurrencies differently” as part of measures expected to raise an additional 2 billion euros in revenue.
Only Die Linke supported the Greens’ proposal outright, though the party also pointed to weaknesses in the draft legislation. Representatives warned that the bill lacked clear limits on offsetting crypto trading losses and said the administrative burden could significantly reduce net tax gains.
How is Germany’s crypto industry responding?
Industry groups and crypto firms have continued defending Germany’s current one-year exemption. Robin Thatcher, a Bitcoin and crypto tax accountant, said removing the rule would weaken Germany’s position as a crypto hub and discourage investment activity.
Comparisons with Austria have also entered the debate. Austria removed its crypto holding exemption in 2022 and introduced a flat 27.5% capital gains tax on digital assets regardless of holding duration.
Bitpanda co-founder Eric Demuth later criticized the Austrian model, saying in a March post on X that the changes created additional bureaucracy without delivering meaningful financial benefits to the government.
Despite the policy uncertainty, German banks have continued expanding into regulated crypto services. Earlier this year, DZ Bank received BaFin approval to launch its “meinKrypto” platform under the European Union’s Markets in Crypto-Assets Regulation framework.
The service allows customers from hundreds of cooperative banks to trade assets, including Bitcoin, Ethereum, Litecoin, and Cardano, directly through their banking applications.
