German Finance Ministry Draft Bill Ends Crypto Tax-Free Holding Period After December 31, 2026

A CDU Bundestag member has warned that Germany's one-year tax-free holding period for cryptocurrency gains may not survive the coalition agreement, with a planned cutoff date of December 31, 2026 for purchases that would retain the existing treatment. The warning, which has circulated among German crypto investors and tax professionals, points to draft legislation already prepared by the Federal Ministry of Finance that would align crypto taxation with traditional securities.

The specific identity of the CDU lawmaker who issued the warning has not been disclosed in the available reporting. The statement's exact wording also remains unpublished in the research material reviewed. What is confirmed is that the German Finance Ministry has drafted a bill to remove tax-free treatment for bitcoin and other cryptocurrency gains, according to a September 15, 2026 report by The Paypers citing CoinDesk. The draft would end a rule that currently allows private investors in Germany to sell bitcoin and other cryptocurrencies free of tax once they have held the assets for more than twelve months.

The political context is the CDU/CSU-SPD coalition agreement that followed Germany's 2026 federal election. The CDU, led by Friedrich Merz, campaigned on a platform that included corporate tax reductions and other business-friendly reforms. The coalition agreement's tax provisions have drawn attention from private client advisors and crypto industry participants because they could significantly alter how long-term crypto holdings are taxed.

CDU Lawmaker Flags December 31, 2026 Cutoff For Crypto Tax-Free Holding Period

The warning from the CDU Bundestag member centers on a transitional provision in the draft legislation. Under the proposal, gains on crypto assets acquired after December 31, 2026 would become taxable regardless of how long they are held. Holdings acquired before that date would continue to be taxed under the existing rules, which allow tax-free sales after a holding period of more than twelve months.

The CVJ.CH weekly review reported that crypto assets are to be treated as capital income, taxed at 26.375% regardless of the holding period. The same report noted that the CDU/CSU had so far been opposed to this approach, which suggests internal coalition tension over the final shape of the reform. The CDU lawmaker's warning appears to reflect concern that the party's earlier opposition may not translate into protection for the one-year holding period in the final legislative text.

A Threads post attributed to a user discussing German Finance Minister Lars Klingbeil indicated that the minister is reviving a plan to end the one-year tax-free holding period for private crypto gains in Germany's 2027 budget. While social media posts carry lower evidentiary weight than official documents, the alignment with the Finance Ministry's draft bill suggests the policy direction is real. The Legal 500's Germany Private Client guide confirmed that the CDU/SPD government's coalition agreement outlines several tax reforms that could significantly impact private clients, though it did not specify the crypto provisions in the snippet available.

The absence of a named CDU lawmaker in the research material is a gap that should be noted. The warning has been reported in secondary sources, but the primary attribution remains undisclosed. This matters for investors trying to assess whether the warning reflects a formal party position or an individual member's assessment.

Current German Crypto Tax Rules And The One-Year Holding Period Explained

Germany's current crypto tax framework is unusually favorable for long-term holders compared with most European jurisdictions. Under Section 23 of the German Income Tax Act, private investors who hold cryptocurrencies for more than twelve months can sell them completely tax-free. This rule, known as the Spekulationsfrist or speculation period, applies to private sales of crypto assets and has made Germany an attractive jurisdiction for long-term bitcoin and ether holders.

The one-year holding period does not apply to all situations. Business assets held by self-employed individuals or corporations do not benefit from the tax-free treatment after twelve months. Income from crypto lending and staking is also treated differently under current rules, with staking rewards potentially extending the holding period to ten years in certain interpretations. The €1,000 annual exemption for private sales transactions provides additional relief for smaller investors who sell within the twelve-month window.

The draft bill would fundamentally change this framework. Gains would be taxed at 25%, plus a solidarity surcharge of 5.5% applied to the tax itself, resulting in an effective rate of 26.375% before any church tax. This is the same flat withholding tax regime, known as the Abgeltungsteuer, that applies to traditional securities like stocks and bonds. The proposal would also classify income generated through crypto lending and staking as capital income, subject to the same treatment. This would capture staking and lending income under the capital income classification for the first time, extending the scope of the reform beyond straightforward trading gains.

Not all crypto-related assets would fall under the new rules. Non-fungible tokens, certain stablecoins, security tokens, and some tokens linked to real-world assets would remain outside the regime, according to the draft. This carve-out creates potential complexity for investors holding mixed portfolios, as the tax treatment would depend on the specific asset classification.

What The Coalition Agreement Says About Crypto Tax Changes

The CDU/CSU-SPD coalition agreement's specific language on crypto taxation has not been published in full in the research material reviewed. The available reporting indicates that the agreement includes tax reforms affecting private clients, but the exact wording of the crypto provisions remains undisclosed in the snippets and fulltext available.

What is clear from the Finance Ministry's draft bill is the operational detail. The legislation is intended to take effect in January 2027, with crypto service providers required to begin withholding taxes automatically from 2028. This two-stage implementation would give exchanges and custodians time to build the technical infrastructure for automatic withholding, while the underlying tax liability would begin for acquisitions made after December 31, 2026.

The automatic withholding requirement from 2028 represents a significant operational change for German crypto service providers. Under the current system, investors self-report crypto gains on their annual tax returns. The new system would shift responsibility to platforms, similar to how German banks already withhold Abgeltungsteuer on dividends and interest. This would require crypto exchanges and custodians serving German customers to implement tax calculation and withholding systems, potentially increasing compliance costs that could be passed on to users.

The coalition agreement's treatment of the holding period question appears to be a compromise. Rather than immediately taxing all existing holdings, the draft grandfathers purchases made before December 31, 2026. This means an investor who bought bitcoin in 2024 and sells in 2028 would still benefit from the tax-free treatment after twelve months, even though the sale occurs after the new rules take effect. An investor who buys bitcoin in February 2027 would face the 26.375% rate regardless of how long they hold.

Crypto Purchases Before December 31, 2026 May Keep Tax-Free Status

The grandfathering provision is the most important detail for current German crypto holders. Under the draft bill, holdings acquired before December 31, 2026 would continue to be taxed under the existing rules. This means the one-year holding period would still apply to those assets, and sales after twelve months would remain tax-free even after the new regime takes effect in January 2027.

This creates a significant incentive for German investors to acquire crypto assets before the cutoff date. An investor who buys bitcoin on December 30, 2026 could potentially sell tax-free in January 2028, while an investor who buys on January 2, 2027 would owe 26.375% on any gains regardless of holding duration. The cutoff creates a cliff-edge effect that could drive purchasing activity in the final months of 2026.

The transition rule also raises documentation questions. Investors will need to prove the acquisition date of their holdings to claim the grandfathered treatment. For assets held on exchanges, transaction records should suffice. For self-custodied assets, blockchain transaction timestamps provide immutable proof of acquisition dates. However, investors who have moved assets between wallets or exchanges may need to maintain careful records to demonstrate the original purchase date.

The draft's treatment of staking and lending income adds another layer of complexity. If staking rewards are classified as capital income under the new rules, the question arises whether rewards earned on grandfathered holdings would also receive grandfathered treatment or whether they would be taxed as new acquisitions. The research material does not provide a clear answer to this question, and it remains one of the open issues that could be clarified during the legislative process.

Industry And Legal Experts React To Proposed Crypto Tax Cutoff

German crypto industry associations and tax professionals have begun responding to the proposed changes, though detailed public statements remain limited in the research material. The Blockchain Bundesverband, Germany's primary blockchain industry association, has not published a formal position in the available sources, but the industry's general concern is that removing the tax-free holding period would reduce Germany's competitiveness as a crypto jurisdiction.

The CVJ.CH report highlighted the political dimension, noting that the CDU/CSU had opposed treating crypto as capital income taxed at 26.375% regardless of holding period. This opposition suggests that some within the governing coalition recognize the competitive risk. Germany's current one-year tax-free rule has attracted long-term crypto investors who might otherwise choose jurisdictions like Portugal, which offers tax-free treatment after 365 days, or Switzerland, which generally does not tax private capital gains.

Tax lawyers advising private clients are likely to focus on the grandfathering provision and the planning opportunities it creates. The Legal 500's Germany Private Client guide flagged the coalition agreement's tax reforms as significant for private clients, indicating that professional advisors are already incorporating the potential changes into their planning. For high-net-worth crypto holders, the December 31, 2026 cutoff creates a clear deadline for restructuring decisions.

The automatic withholding requirement from 2028 has drawn less public attention but represents a significant compliance burden. German crypto exchanges and custodians would need to implement systems to calculate gains, apply the correct tax rate, and remit withholding to the tax authorities. This could increase costs for platforms and potentially reduce the number of service providers willing to operate in the German market.

What Happens Next: Legislative Process And Timeline For Crypto Tax Reform

The draft bill from the Federal Ministry of Finance represents an early stage in the legislative process. The bill would need to pass through the Bundestag, Germany's lower house of parliament, where the CDU/CSU-SPD coalition holds a majority. The Bundesrat, representing the federal states, would also need to approve the legislation if it affects state tax revenues.

The timeline outlined in the draft suggests the government intends to move relatively quickly. The January 2027 effective date for the new tax treatment means the legislation would need to pass in 2026 to give investors and service providers adequate notice. The December 31, 2026 cutoff for grandfathered purchases aligns with this timeline, creating a clear transition point.

The CDU lawmaker's warning suggests that the holding period's survival is not guaranteed even within the coalition. If the CDU/CSU's earlier opposition to treating crypto as capital income translates into amendments during the legislative process, the final bill could differ from the Finance Ministry's draft. Possible modifications include a longer holding period before tax-free treatment, a lower tax rate, or a higher exemption threshold. Alternatively, the coalition could accept the draft largely as written, given the need for revenue to fund other priorities.

For German crypto investors, the next concrete signal to watch is the formal introduction of the bill in the Bundestag and the first reading debate. The committee stage would provide the first opportunity for amendments, and the Finance Committee's report would indicate whether the CDU/CSU intends to protect the one-year holding period or accept its elimination for new purchases. The identity of the CDU lawmaker who issued the warning may also become clear during these debates, providing insight into the party's internal dynamics on the issue.

The base case on current evidence is that the draft bill will pass with the December 31, 2026 cutoff intact, given the coalition's majority and the Finance Ministry's clear drafting. The bull case for investors is that CDU/CSU opposition, reflected in the lawmaker's warning, leads to amendments preserving some form of long-term tax advantage. The bear case is that the reform passes as drafted and potentially accelerates, with the automatic withholding requirement from 2028 creating additional friction for German crypto users.