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Germany’s one-year holding period for crypto assets has not been abolished. A ministerial draft bill proposes a fundamental change, but a draft is not a law, and nothing has been decided yet.
What the draft bill proposes
The draft provides for a change of system for so-called exchange crypto assets: away from private disposal transactions under section 23 of the German Income Tax Act (EStG) and towards income from capital assets under section 20 EStG. For the newly acquired holdings affected, the existing one-year holding period would no longer apply.
A ministerial draft is not a law
This point matters. The German Bundestag and Bundesrat have not adopted the new rules. Numerous points of detail remain open, and the draft can still change during the legislative process.
Because federal states and municipalities share in income tax revenue, amendments to substantive income tax law generally also require the consent of the Bundesrat.
The 25 percent rate is not settled either
The proposed taxation of certain exchange crypto assets as capital income is part of the draft. It has not been enacted.
Is 31 December 2026 a legal cut-off date?
No. Grandfathering for holdings acquired up to the end of 2026 is currently under discussion. That date is not laid down in law at present.
What applies right now
Under the law as it currently stands, section 23 EStG continues to apply to typical crypto assets held as private assets. Once the one-year holding period has expired, a disposal gain can in principle be tax-free.
For active traders, the proposed rules could bring partial advantages. For long-term holders, losing tax exemption after the holding period would generally be a disadvantage.
What investors can sensibly do now
A blanket recommendation would not be serious advice. There is currently no adopted transitional rule on which such planning could safely be based. For larger amounts, the specific situation should be assessed individually.
We are monitoring the legislative process and will update our assessment as soon as there are reliable changes. Only then can it be seriously judged which rules will actually come into force and what tax consequences will follow.
Legal status
This article reflects the legal and information status as at 11 September 2026. The applicable law remains section 23 EStG. The ministerial draft is not yet applicable law and may still change.
