Few topics currently generate as many half-truths as the question of whether Germany's one-year holding period for crypto-assets will be abolished. The essential first step is to keep four levels apart: law in force, political signal, failed bill, and speculation. Only the first is binding.
Level 1: What actually applies
In Germany, cryptocurrencies count as "other economic assets" under the Income Tax Act. They therefore fall under the rules for private disposal transactions in Section 23 EStG — and not under the flat withholding tax that applies to shares or ETFs.
The core rule: holding crypto-assets for more than one year means a tax-free disposal, regardless of the size of the gain.
This position applies unchanged for the 2026 tax year. It is supported by Federal Fiscal Court case law and by the Finance Ministry circular on the income tax treatment of crypto-assets.
The period calculation is frequently done wrong. The clock starts not on the acquisition date but on the following day, by analogous application of Section 187(1) of the Civil Code. A purchase on 15 March 2025 means the period runs from 16 March 2025 and ends at the close of 15 March 2026. A tax-free sale is possible from 16 March 2026 at the earliest. Selling one day early forfeits the exemption entirely.
Other key parameters of the current position:
Gains realised within the holding period benefit from an exemption limit of 1,000 euros per year, raised from a previous 600 euros. This is a threshold, not an allowance: exceed it and the entire gain becomes taxable, not merely the excess.
Income from staking, mining and comparable activity falls under Section 22 No. 3 EStG as other income, with its own 256-euro annual threshold. If the coins received are later sold at a profit within one year, Section 23 EStG applies on top.
FIFO is the governing allocation method in Germany. A transfer between one's own wallets does not in principle trigger tax and does not reset the holding period.
For hard forks, the Finance Ministry circular allocates the new coins to the original acquisition; the holding period of the original coins continues to run for the forked coins. For classic airdrops without consideration there is no acquisition event, so Section 23 EStG does not apply — Section 22 No. 3 EStG must be examined instead.
Level 2: The political signal
Since the federal press conference of 29 April 2026, crypto taxation has been politically prominent. The Federal Finance Minister announced there that the existing treatment would be reviewed and reshaped.
On 3 July 2026 Finance Minister Lars Klingbeil published his own budget draft providing for abolition of the holding period, and presented it officially on 6 July 2026. The government's draft federal budget for 2027 states that rules on the taxation of crypto-assets will be "set in motion".
An announcement in a budget draft is not a law. An actual change requires a fully drafted bill, a cabinet decision and the complete parliamentary process. As of early August 2026 no published draft bill existed.
Level 3: The failed motion
A Green Party motion (Bundestag printed paper 21/5752) to delete the holding period found no majority in the Finance Committee. The CDU/CSU positioned itself clearly against reform on 7 May 2026.
The political constellation therefore weighs against rapid change rather than supporting it. That can shift — but it is the current state of play.
Level 4: What remains speculation
1 January 2027 is cited as a target date. It is not a fixed one. The earliest a change could take effect is the 2027 assessment period, and only if a law is passed in time. Nothing further will change for the 2026 tax year.
Several variants are under discussion, from simple deletion of the holding period to moving crypto into the 25 percent flat withholding tax regime. Which variant becomes law — if any — is open.
Grandfathering for existing holdings is considered likely on constitutional grounds; the Federal Constitutional Court has developed clear guidance on legitimate expectations and on genuine versus non-genuine retroactivity, and the Green Party draft itself provided for such a rule. It should not be relied upon, however, since the specific design depends on the final legislation.
What to do now
Regardless of how the reform debate ends, one thing already changed in 2026: since 1 January 2026 crypto service providers have been obliged under the DAC8 directive to record transaction data completely, with automated transmission to the tax authorities from 2027.
That creates a reconciliation problem for anyone who has been tracking holding periods, FIFO ordering and wallet separation manually. The tax office's records and your own must match.
Three practical consequences:
First, secure and archive acquisition data and transaction histories now — particularly from providers that have exited the European market.
Second, document losses. There is no obligation to declare them, but losses from private disposal transactions can be carried forward to subsequent years and offset against future gains.
Third, keep the filing deadlines in view. For the 2025 tax year the deadline is 31 July 2026 without professional advice and 1 March 2027 with a tax adviser.
This article is not a substitute for tax advice. For larger holdings, or where the classification of individual transactions is unclear — DeFi, lending or wrapped tokens, for instance — there is no substitute for the assessment of a qualified tax adviser.