According to Cryptopolitan on May 22, Germany’s Federal Parliament’s Finance Committee rejected the crypto tax reform proposal put forward by the Greens. The proposal aimed to remove the tax-exempt policy for selling cryptocurrencies after holding them for more than one year. Under Germany’s current laws, capital gains from the sale of cryptocurrencies held for more than a year are exempt from capital gains tax, and this rejection confirmed that the provision remains in effect. The Greens estimate that removing the tax exemption could generate an additional €11.4 billion in tax revenue per year.
Opposition stances of each party: CDU/CSU, SPD, and AfD’s specific positions
The ruling CDU/CSU, led by German Chancellor Friedrich Merz (Friedrich Merz), said the law drafted by the Greens “does not close any loopholes,” adding that the proposal’s plan to apply different tax treatment to cryptocurrencies than to precious metals or foreign legal tender could actually introduce new problems.
The SPD is generally inclined to impose heavier taxes on cryptocurrencies, but its parliamentary representatives said they want to postpone the vote and wait for Finance Minister Lars Klingbeil to come forward with his own reform proposal on the matter. Germany’s Alternative for Germany (AfD) insists the government should focus on reducing taxes rather than looking for new sources of revenue. Critics also noted that under the proposal, cryptocurrency investors would bear a heavier tax burden than people investing in ordinary stocks.
The Greens’ legislative rationale and revenue estimates
The Greens believe that Germany’s current one-year holding period exemption for cryptocurrencies was originally designed for traditional long-term holdings such as antiques, and that crypto assets should be treated the same as other investments. Estimates from Frankfurt School of Finance and Management show that eliminating the tax exemption could bring in about €11.4 billion in additional tax revenue per year. The Greens’ lawmakers said they hope to use at least half of that to increase budget revenue. While the Left Party supported the bill, it acknowledged flaws in the draft, including the risk of increased bureaucracy, as well as the failure to set an offsetting cap for losses from cryptocurrency trading.
DAC8 directive: reporting obligations that took effect on January 1, 2026
Even though the tax reform proposal was not approved, Germany has implemented the EU’s DAC8 directive on January 1, 2026. It requires crypto service providers to collect detailed information about customers and their transactions and submit it to tax authorities to improve the accuracy of reporting crypto profits. This measure is on a different regulatory level from the rejected tax rate reform proposal. The DAC8 reporting obligations still apply even if tax rate policies do not change.
FAQ
What are the specific provisions of Germany’s current cryptocurrency tax law?
Under Germany’s current laws, capital gains from the sale of cryptocurrencies held for more than one year are exempt from income tax. The “holding period” rule continues to apply after the committee’s rejection. Cryptocurrency sale proceeds from holdings of less than one year are normally taxed at the individual income tax rate.
What practical impact does the DAC8 directive have on German cryptocurrency users?
The DAC8 directive took effect in Germany on January 1, 2026. It requires crypto service providers to collect detailed information about customers and transactions and submit it to tax authorities. Even though the one-year holding period tax exemption continues to be valid, users’ transaction information will still be systematically submitted, and requirements for the accuracy of tax filings have effectively been strengthened.
Why did the Greens’ tax reform proposal receive support only from the Left Party?
Each party’s reasons for opposition differ: the CDU/CSU believes the proposal introduces new problems; the SPD wants to wait for the finance minister’s overall plan; and the AfD argues for tax cuts. In addition, critics pointed out that the proposal would make cryptocurrency investors bear a heavier tax burden than stock investors, which does not align with principles of tax fairness.
