Is Germany Abolishing the Crypto Holding Period? 2026 Reform Update

In short (as of 9 July 2026): Germany's one-year holding period for private crypto sales still applies, unchanged. If you hold Bitcoin, Ether & co. for more than a year and then sell, the gain is tax-free under current law (§ 23 EStG). A reform is being debated politically – but nothing has been enacted so far. This article cleanly separates what is current law, what is a political signal, what is a failed bill, and what is pure speculation, and shows you how to prepare without betting on rumors.

Does the one-year crypto holding period still apply in 2026?

Yes. For the 2026 tax year the one-year holding period applies unchanged. If you sell privately held cryptocurrency more than one year after acquiring it, the gain is tax-free. If you sell within a year, it is a private disposal transaction under § 23 EStG – the gain is then generally taxable. Despite all the reform debate, nothing has changed about this basic rule.

Crypto assets count as "other economic goods" (andere Wirtschaftsgüter) for income tax purposes. The Federal Fiscal Court confirmed this in its ruling of 14 February 2023 (IX R 3/22) and clarified at the same time that taxing crypto gains is constitutional. The binding guidance for the tax authorities is the BMF letter of 6 March 2025, which sets out the details for the treatment of crypto assets.

The €1,000 exemption limit (Freigrenze) matters too: if your total gains from all private disposal transactions in a calendar year stay below €1,000 (since assessment period 2024; previously €600), everything remains tax-free. It is an exemption limit, not an allowance – once the limit is reached or exceeded, the entire gain is taxable, not just the portion above €1,000.

Taxable crypto gains are taxed at your personal progressive income tax rate (14% entry rate up to a 45% top rate under § 32a EStG) – not at the 25% flat rate (Abgeltungsteuer) that applies to shares and other capital income. In 2026, the 42% rate kicks in from €69,879 and the 45% top rate from €277,826 of taxable income; the basic tax-free allowance (Grundfreibetrag) is €12,348. A 5.5% solidarity surcharge only applies where the assessed tax exceeds the threshold (2026: €20,350 for single filers) – most investors do not pay it. The saver's allowance (Sparer-Pauschbetrag) of €1,000 (€2,000 for jointly assessed spouses) under § 20 EStG applies only to capital income and not to private crypto gains.

What exactly is the holding period? Understanding the speculation period

"Holding period," "speculation period" and "one-year period" all mean the same thing: the span between acquisition and disposal. If more than 365 days lie between purchase and sale, the gain leaves the scope of § 23 EStG and is tax-free. The term "speculative transaction" dates from before the current wording of the law; the correct term today is private disposal transaction (privates Veräußerungsgeschäft). Unlike with shares, then, privately held cryptocurrency enjoys a genuine tax exemption once the period has elapsed.

Which crypto assets does the holding period cover?

The one-year holding period applies to privately held currency and payment tokens such as Bitcoin and Ether, and to utility tokens when you sell them. Importantly, there is no extension to ten years if you stake or lend your coins in the meantime – the earlier worry about a "ten-year period" was cleared up by the BMF letter. For security tokens, capital income (§ 20 EStG) may apply instead, depending on how they are structured. NFTs are expressly excluded from the BMF letter; there is no dedicated administrative guidance for them yet, so their classification has to be assessed case by case.

How is the holding period calculated? FIFO and specific identification

To match the coins sold, specific identification (individual allocation) applies first. Where that is not possible, FIFO (first in, first out) determines the holding period, while valuation is generally based on the average-cost method – as a simplification, FIFO may also be used for valuation. The chosen method is fixed per wallet and per asset and remains locked until that asset is fully sold within that wallet. Every swap – including crypto-for-crypto – counts as a sale and a new purchase: the one-year period starts again with each swap. This is precisely why complete records of acquisition dates are crucial to be able to prove the tax exemption at all.

What is actually decided about crypto tax – and what is just politics?

A lot of half-truths circulate on this topic. The most important step for investors is to keep four levels cleanly apart: current law, political signal, failed bill, and speculation. Only the first level is binding – everything else can still change or fall away entirely.

Klingbeil's announcement in April 2026

On 29 April 2026, Federal Finance Minister and Vice-Chancellor Lars Klingbeil (SPD) signaled that crypto should be "taxed differently" in future. Contrary to how it is sometimes portrayed, this was not merely one person's view: the signal was tied to the coalition's key-figures decision on the 2027 federal budget, which the government carried together with its coalition partner CDU/CSU. Klingbeil did not name specific legislative text – the details were promised for the budget preparation in July 2026. So this is a government initiative at the political level, not yet a bill.

The Greens' bill – and why it failed

On 5 May 2026, the BÜNDNIS 90/DIE GRÜNEN parliamentary group introduced a bill (Bundestag Drucksache 21/5752) that sought to abolish the one-year holding period for crypto assets acquired from a cut-off date (proposed: 1 January 2026) and to tax disposals at the personal income tax rate regardless of holding duration – with grandfathering for holdings acquired earlier. The Greens put the additional revenue at around €5 billion per year; that estimate, however, is disputed.

Here it is worth looking closely, which many reports fail to do: it was not the Bundestag plenary that "rejected" the bill. Rather, the Finance Committee recommended rejection at its session on 20 May 2026 (recommendation for a decision, Drucksache 21/6112). CDU/CSU, AfD and SPD voted for rejection; in favor of the Greens' bill, alongside the Greens, was Die Linke. The bill therefore obtained no majority. Anyone who only reads "the Bundestag rejected it" misses both nuances: the committee's role and Die Linke's support.

The government draft of the 2027 federal budget (6 July 2026)

The most recent and most solid development: on 6 July 2026 the federal government adopted the government draft of the 2027 federal budget. It states that the federal government will "bring forward rules on the taxation of crypto assets." That is an important signal – but a budget draft is not a tax law. No ministerial draft (Referentenentwurf) or formal bill on crypto taxation exists yet. Finance Minister Klingbeil is publicly targeting 1 January 2027 as a possible start date. Until a law is enacted, the current legal position stands.

Why a reform at all?

The background is fiscal: the federal government is looking for revenue sources to consolidate the budget. The key figures for the 2027 budget mention a target of around €2 billion – though this figure bundles crypto taxation together with combating financial and tax crime, so it is not a pure crypto-tax forecast.

It is often argued that Germany stands alone in the EU with its tax exemption. That is not quite true. Portugal, too, exempts privately held cryptocurrency after a holding period of at least 365 days (0% tax; 28% within a year), and Cyprus levies no tax at all on private crypto gains without any holding period. Germany's rule is generous, but in the EU context it is not a one-off – portraying Germany as an "outlier" is too simplistic.

What would a flat tax on crypto mean?

Important upfront: this is a scenario, not current law. The "likely model" most often cited in the press and specialist commentary – classifying crypto into capital income (§ 20 EStG) with a flat withholding tax of 25% plus a 5.5% solidarity surcharge – appears in no official document. It does not come from the BMF press release of 6 July 2026, but from commentary by tax law firms and specialist media. Treat it accordingly as a possibility, not a fact.

For long-term holders who rely on a tax-free exit after one year, such a model would tend to be less favorable. For investors with short- to medium-term gains and a high personal tax rate, a flat rate could turn out lower than the progressive tariff. Whether and how such a model arrives – at what rate, with what transitional rules and what loss offsetting – depends solely on the final law.

When could a crypto reform in Germany take effect?

Answer first: Nothing changes for 2026 – the 1-year rule applies. The earliest realistic point for a reform is assessment period 2027, and even then only if a law is enacted in time. No concrete effective date has been set.

As long as no law is published in the Federal Law Gazette (Bundesgesetzblatt), you should not treat any start date as certain. The 1 January 2027 target named by Klingbeil is a political intention, not a fixed date.

Would existing crypto holdings be protected?

Answer first: Grandfathering is expected for coins already held, but the exact design depends on the final law. German constitutional law places tight limits on genuinely retroactive taxation (protection of legitimate expectations, Vertrauensschutz). Do not, however, rely on every future gain automatically remaining tax-free before the transitional rules are settled.

Should investors sell now, ahead of a reform?

Answer first: Selling ahead of a possible reform can create tax certainty for coins that already meet the one-year holding period – but it is not automatically the right decision. Before you act, weigh the tax effect, market risk, your investment goals and your documentation.

Technically, so-called "harvesting" works like this: an investor with long-term conviction can sell coins tax-free once the holding period has elapsed and immediately buy them back to raise the acquisition cost (the cost basis) – there is no German equivalent of the wash-sale rule for § 23. But be careful: the repurchase resets the acquisition date and the holding period. Should a reform arrive with a cut-off date, coins bought back in 2026/2027 could fall under the new law. This is not tax advice – every arrangement has to be assessed individually.

How do FIFO, wallet records and acquisition dates help?

Answer first: To use the one-year holding period, you have to prove when the coins sold were acquired. In practice, the German crypto tax calculation hinges on a complete transaction history, wallet-level records, and a consistent allocation method such as specific identification or FIFO.

For trades on foreign exchanges (and generally on DEXes), an increased duty to cooperate applies under § 90(2) AO: you must obtain the evidence yourself – above all regular, complete downloads of transaction histories. Data loss through exchange insolvencies or hacks is at your expense for tax purposes. Crypto gains are declared in Anlage SO of the tax return (section "Private disposal transactions – other economic goods") and filed electronically via ELSTER. A self-prepared tax return for tax year 2025 is due by 31 July 2026.

This is exactly where crypto tax software adds practical value. Divly imports transactions from exchanges and wallets, classifies purchases, sales, swaps and income for tax, and produces a report you can use for your tax return or for your tax adviser. If a reform arrives with a cut-off date, a clean history with acquisition dates is worth its weight in gold – you can then show beyond doubt which coins already meet the holding period.

How would staking, DeFi and NFTs be affected by a reform?

Answer first: These areas already have their own rules, which are initially untouched by the holding-period debate – but a reform might sweep them in as well. Passive staking and lending rewards are other income under § 22 No. 3 EStG and are taxed at market value on receipt; for them a €256 per year exemption limit applies. If you later sell the coins received, a separate one-year holding period starts for them.

Importantly: staking or lending does not extend the holding period to ten years – this previously feared extension is not applied to currency tokens. NFTs are expressly excluded from the BMF letter; without dedicated administrative guidance, their classification has to be assessed case by case. Should a reform shift crypto as a whole into capital income, the rules for staking income and loss offsetting could change too – that, again, is pure speculation for now.

What is confirmed, what is uncertain – and what should you ignore?

This overview summarizes the position as of 9 July 2026 and separates settled law from open questions and rumors.

Frequently asked questions about the crypto holding period and 2026 reform

Does the 1-year crypto holding period still apply in 2026?

Yes. In tax year 2026 the one-year holding period applies unchanged: after more than a year of holding, private crypto gains are tax-free (§ 23 EStG).

Has Germany already abolished the crypto holding period?

No. There is no enacted law. A Greens' bill to abolish it found no majority; the federal government has merely announced that it will "bring forward" a reform.

When could a crypto tax reform take effect in Germany?

At the earliest in assessment period 2027 – and only if a law is passed in time. Nothing changes for 2026. Finance Minister Klingbeil cites 1 January 2027 as a target, but that is not a fixed date.

Would existing crypto holdings be protected in a reform?

Grandfathering is considered likely for constitutional reasons (protection of legitimate expectations), and even the Greens' bill provided for it. The concrete design, however, depends on the final law.

What happens if I bought in the last few months?

Coins you hold for less than a year are subject, on sale, to taxation as a private disposal transaction under current law. Whether a future reform will tie in to a cut-off date is still open – which is why complete acquisition records are important.

Would a 25% flat tax be better or worse than the current rule?

That depends on your situation and is pure hypothesis, since nothing has been enacted. For long-term holders, losing the tax exemption after one year would tend to be a disadvantage; with a high personal tax rate, a flat rate could be cheaper for short-term gains.

Should I sell my crypto ahead of a possible reform?

Not automatically. For coins that already meet the holding period, a sale can create tax certainty. But weigh the tax effect, fees, market risk and your goals, and bring in advice for large holdings.

Does the €1,000 exemption limit still apply to crypto gains?

Yes. If your total gains from private disposal transactions in a calendar year stay below €1,000, they are tax-free. Once the limit is reached, the entire gain is taxable – it is an exemption limit, not an allowance.

How is the one-year holding period calculated in Germany?

What matters is the span between acquisition and disposal. For allocation, specific identification applies first, otherwise FIFO – per wallet and per asset. Every swap starts the period anew.

Does the holding period also apply to staked coins?

The period is not extended to ten years by staking or lending. The staking rewards themselves are taxable on receipt as other income (§ 22 No. 3 EStG); a separate one-year period runs for their later sale.

Are NFTs affected by the crypto holding-period rules?

NFTs are expressly excluded from the BMF letter, and there is no dedicated administrative guidance. Their tax classification therefore has to be assessed case by case.

Can Divly show which coins have met the one-year holding period?

Divly imports your transactions and calculates gains and losses under the German rules, so you keep an overview of acquisition dates and holding periods and receive a report for your tax return.

Conclusion

As of 9 July 2026: the one-year crypto holding period is in force, and anyone who holds for more than a year sells tax-free. A reform has been announced politically and is conceivable from 2027, but there is neither a bill nor a fixed date – and the much-quoted 25% flat tax is speculation for now. The most important thing you can do now: document your transaction history cleanly, keep an overview of your holding periods, and keep an eye on the official drafts from the BMF and the Bundestag instead of reacting to rumors.

All tax information we provide does not constitute tax advice, financial advice, accounting advice or legal advice, and neither you nor any other party should rely on it to avoid tax consequences. For advice tailored to your situation, please consult a qualified tax advisor. We make no warranty and give no assurance as to the accuracy of the information provided here. All statements contained herein represent our opinion and not a statement of fact.