Germany's Bitcoin tax plan hits a pause

What happened

Bitcoin was one of the most searched terms on Google in Germany this weekend, driven by a debate over new tax plans. The federal finance ministry wants to end the rule that lets private investors sell crypto tax-free after holding it for more than a year. According to BTC-ECHO, a cabinet decision planned for Wednesday, 14 October, was taken off the agenda.

Former FDP lawmaker Frank Schäffler said the proposal was still in review between ministries and would not be discussed by the cabinet as planned, BTC-ECHO reported. Schäffler described the delay as a sign that the resistance was having an effect. No new date has been given.

What the draft says

The finance ministry published its draft on 30 September, according to stock3. Gains from exchange-type crypto assets such as bitcoin would be treated as income from capital assets. The tax-free sale after one year would end for coins bought from 1 January 2027, while assets acquired before that date would stay protected. BTC-ECHO reports that the gains would be taxed at the 25% capital gains rate plus possible surcharges, regardless of how long they were held.

The petition and the hearing

A petition to keep the one-year rule gathered 44,439 signatures, well above the 30,000 needed for a public hearing, stock3 reported. The Bundestag petitions committee heard it on 12 October. Ministry representatives said the reform was still being coordinated within the government and that the plan to tax crypto gains regardless of holding period stood. One representative also raised the idea of ending the one-year exemption for other assets such as gold, although there are no concrete plans for that.

Lawyer Ingo Heuel, who supported the petition, criticised the widely differing estimates of tax revenue and said the reform was not ready for a decision. Tax adviser Afra Stöhr said it was not yet final whether the holding period would go. Ulrike Lierow-Schad of the industry association Bundesblock called for legal certainty and suggested waiting for data from the EU's DAC8 reporting rules.

Background: a wider tax debate

The crypto plan is part of a broader discussion about holding periods. Tichys Einblick reported on 15 October that several Bundesrat committees recommend taxing gains from selling property that the owner does not live in, regardless of how long it was held, instead of exempting it after ten years. The article placed this alongside the Bitcoin holding period and reported interest in taxing gold gains.

Why it matters for crypto holders

The holding period has shaped how many people in Germany treat a crypto wallet: buy, hold for a year, then sell without tax. Even if the cabinet adopts the reform, both the Bundestag and the Bundesrat still have to deliberate on it, BTC-ECHO notes. In a BTC-ECHO and IU International University survey, experts put the average likelihood of the reform passing within six months at 65%. The reports name bitcoin as the main example and do not spell out how every type of token, including a stablecoin such as USDC, would be handled.

What to watch next

Watch for a new cabinet date, any changes to the draft after the hearing, and the position of CDU/CSU lawmakers, at least twelve of whom have criticised the plan according to BTC-ECHO.

What it means for ODIX Pay users

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