The crypto holding period and the tax treatment of cryptocurrencies are once again attracting political attention. Under the current rules, gains from certain crypto investments may be tax-free after one year, provided specific conditions are met. However, there are now proposals to abolish the crypto holding period.
Although a proposal by the Green Party was rejected, the debate is far from over. On the contrary, with the planned adoption of the 2027 federal budget this summer, it is likely that changes to the crypto holding period will continue to be discussed.
Crypto holding period: abolish, change or retain? The key points at a glance:
- Under the current rules, gains from private cryptocurrency transactions may be tax-free if the assets are sold after a holding period of one year.
- The parliamentary group of Alliance 90/The Greens has proposed abolishing this holding period for crypto assets.
- Stronger taxation of cryptocurrencies is also being discussed within the federal government.
- Investors should already ensure that all transactions are fully documented and assess the potential tax implications.
What currently applies to cryptocurrencies?
Currently, gains from the sale of cryptocurrencies may be tax-free under certain conditions. According to the current view of the German tax authorities, Bitcoin, Ether and other cryptocurrencies held as private assets are generally classified as “other assets”. If they are sold within one year of acquisition, any gain may be subject to tax. If the sale takes place after this period, the gain remains tax-free in many standard cases.
For investors, it is therefore not only the amount of the gain that matters, but also, in particular, the date of acquisition. Over recent years, the holding period has become an important planning tool for private investors.
Why is the crypto holding period being debated?
Policymakers are currently examining various ways to increase the taxation of cryptocurrency gains. A legislative proposal submitted by the parliamentary group of Alliance 90/The Greens calls for the abolition of the one-year holding period for crypto assets. Under the proposal, gains from private disposals of cryptocurrencies would be taxed at the investor’s personal income tax rate, regardless of how long the assets have been held.
Although the proposal has not been adopted to date (it was rejected by the CDU/CSU, AfD and SPD parliamentary groups, while Alliance 90/The Greens and The Left voted in favour), the political debate shows that the current preferential tax treatment of cryptocurrencies is increasingly being questioned. In addition, discussions surrounding the federal government’s budget planning have included potential additional sources of revenue and the possibility of higher taxation of crypto gains.
For investors, this means one thing above all: the current tax treatment should not be regarded as permanently secure.
“Even though no legislative changes have been adopted so far, investors should already ensure that their crypto transactions are fully documented. Changes to tax rules could have a significant impact, particularly on larger portfolios.”
Dr. Christopher Arendt – ACCONSIS
What should investors consider now?
Regardless of any potential legislative changes, maintaining complete and accurate records of all crypto transactions remains essential. This includes, in particular, acquisition and disposal dates, wallet transfers, crypto-to-crypto exchanges, transaction fees and evidence of the trading platforms used.
Anyone who regularly trades cryptocurrencies or engages in additional activities such as staking, lending or DeFi applications should review their tax position particularly carefully. Even under the current rules, complex transactions can give rise to tax risks.
This is where the role of tax advice becomes increasingly important as part of a holistic wealth planning strategy. An early review of a transaction history can help identify potential tax risks and ensure investors are prepared for possible legislative changes.
Keep a close eye on potential changes to the crypto holding period!
The crypto holding period remains in force for the time being, but its future is the subject of ongoing political debate. Whether legislative changes will actually be introduced, and in what form, remains uncertain. Investors should follow developments closely and ensure that their crypto assets are fully documented. Those holding larger portfolios or carrying out complex crypto transactions should assess the potential tax implications at an early stage.
Do you need support?
Take advantage of our blockchain tax advisory services.
FAQ on the possible abolition of the crypto holding period
Does the one-year crypto holding period still apply?
Yes. Under the current rules, gains from the disposal of cryptocurrencies held as private assets may be tax-free in many cases if the assets are sold after a holding period of one year.
What does the Green Party’s proposal provide for?
The proposal would require gains from cryptocurrencies to be taxed at the investor’s personal income tax rate, regardless of how long the assets have been held.
Has the abolition of the holding period already been approved?
No. The proposal has not been adopted to date. However, future legislative changes remain possible.
What should crypto investors do now?
A complete record of all transactions is essential. In addition, larger or more complex crypto portfolios should be reviewed from a tax perspective at an early stage.
Do you need support?
Take advantage of our professional full-service blockchain tax advisory services for private investors and our crypto tax advisory services for businesses.
Your ACCONSIS contact
Dr. Christopher Arendt
Lawyer, specialised lawyer for tax law
Managing Director of ACCONSIS
Service phone
+49 89 547143
or via email
c.arendt@acconsis.de
Image source:
© Wolfilser – stock.adobe.com
