Draft bill on crypto taxation for private assets
On 30 September 2026, the Bundesministerium der Finanzen (BMF, Federal Ministry of Finance) sent a ministerial draft bill for an act reforming the taxation of certain crypto assets held as private assets to associations. The subject of the draft is a tax realignment for certain crypto assets that are used as a medium of exchange and, in the Ministry’s view, have now gained considerable importance as private capital investments.
Under the current legal position, in the absence of specific statutory provisions, these crypto assets are covered in the category of other income. Of particular relevance is § 23 Abs. 1 Satz 1 Nr. 2 EStG (German Income Tax Act) on private disposal transactions involving other assets. Under this provision, capital gains are generally disregarded for income tax purposes after a one-year holding period has expired.
The ministerial draft bill provides for this classification to be changed in future for certain crypto assets. In particular, Bitcoin and Ether are intended to be affected, provided they meet the stipulated requirements.
Distinguishing the crypto assets concerned
Exchange crypto assets as a new point of reference
The draft refers to crypto assets that can be transferred and stored electronically as digital representations of value. According to the explanatory memorandum of the Bundesministerium der Finanzen, this is done primarily using blockchains. The value of such units is accordingly based on their acceptance and use as a medium of exchange.
At the same time, the Ministry makes clear that these are not currencies. They are neither issued nor guaranteed by the state and therefore do not rest on a sovereign basis.
To distinguish them from other forms of digital assets, the units covered are to be referred to as exchange crypto assets. This means crypto assets within the meaning of Art. 3 Abs. 1 Nr. 5 MiCAR (Markets in Crypto-Assets Regulation) that are accepted as a medium of exchange. Bitcoin and Ether are mentioned in particular as examples.
Excluded token categories
Not all digital assets are intended to be covered by the planned new rules. According to the ministerial draft bill, the following categories in particular are to remain outside the new regulatory scope:
- e-money tokens,
- non-fungible tokens,
- security tokens.
The relevant applicable tax rules are to continue to apply to these assets. The new regulation is therefore limited to the exchange crypto assets described in greater detail in the draft and is not intended to cover all forms of crypto assets or tokens.
Shift to income from capital assets
Reasoning of the Bundesministerium der Finanzen
The Bundesministerium der Finanzen assumes that the crypto assets concerned differ fundamentally from the other assets involved in private disposal transactions. In support of this, the draft refers to their speculative use, their high liquidity and the absence of depreciation.
In the Ministry’s view, these assets are acquired, used and disposed of in practice in a way that more closely corresponds to assets in the area of § 20 EStG. Their increasing prevalence and economic importance on the one hand, and their intrinsic difference from other assets on the other, are therefore intended to make taxation under the general provisions on other income no longer appear appropriate.
Planned inclusion under § 20 EStG
In future, returns from exchange crypto assets are to be allocated to income from capital assets. Both current returns and gains from disposal are to be covered.
As current returns, the draft specifically mentions returns from lending and passive staking. Disposal gains are also to fall under § 20 EStG, insofar as they concern the exchange crypto assets covered by the new rules.
This would eliminate the previously central significance of the one-year holding period for exchange crypto assets acquired or received after the cut-off date. Under the draft, gains from such assets would have to be taken into account for tax purposes irrespective of the holding period.
Withholding tax and tax consequences
Charge to capital gains withholding tax
In future, gains from exchange crypto assets are to be subject to flat-rate withholding tax like other income from capital assets. Taxation at 25 percent plus solidarity surcharge is envisaged. Including the solidarity surcharge, this results in a burden of 26.375 percent.
According to the draft, rules that are already familiar in the area of investment income are also to apply. These include in particular:
- the savers’ lump-sum allowance,
- loss offsetting against other investment income, for example from shares,
- the more favourable tax treatment test under § 32d Abs. 6 EStG.
According to the financial table in the draft, the Ministry expects additional tax revenue of EUR 70 million for 2027 and EUR 175 million for 2028; from 2029 onwards, when fully effective on an annual basis, this is expected to reach around EUR 350 million per year. By contrast, the compliance costs are not quantified in the draft.
Valuation and order of disposals
Details on valuation and the order of disposals are not to be laid down directly in the Einkommensteuergesetz. Instead, the ministerial draft bill provides for rules to be issued by statutory instrument.
However, a special rule on acquisition costs is to be included directly in the Einkommensteuergesetz. In the case of exchange transactions without any action by the taxpayer or merely in return for minor activities, the acquisition costs for exchange crypto assets are to amount to EUR 0. According to the supplementary explanations, this particularly concerns cases of exchange crypto assets received free of charge, such as airdrops or bounties; in these cases, taxation would be shifted to a later disposal.
Temporal scope of application and legacy holdings
Application from 2027
According to the ministerial draft bill, the new rules are to enter into force on 1 January 2027. They are to apply for the first time to exchange crypto assets acquired or received after 31 December 2026.
For holdings existing before that date, the draft does not provide for inclusion in the new system. For legacy holdings, §§ 22 and 23 EStG, including the one-year holding period, are to continue to apply unchanged.
The draft therefore distinguishes between exchange crypto assets acquired or received after the cut-off date and legacy holdings. This distinction is central to the substantive and temporal scope of application of the planned reform.
Implementation as an amending act
The project is structured as an amending act. Among other things, the Einkommensteuergesetz as amended on 8 October 2009 is to be amended.
Already in connection with the government draft of the 2027 federal budget, the intention was apparent to allocate certain crypto assets to income from capital assets in future. Before the official ministerial draft bill, an uncoordinated draft reforming the taxation of crypto assets held as private assets had also already circulated in early September 2026.
Capital gains withholding tax deduction from 2028
Withholding at source by domestic service providers
From 1 January 2028, an automatic capital gains withholding tax deduction is also to be introduced. This corresponds to the system that is customary for other investment income.
Domestic crypto-asset service providers or operators within the meaning of the Kryptowerte-Steuertransparenz-Gesetz (Crypto Asset Tax Transparency Act) are to be obliged to withhold tax. Domestic branches or permanent establishments of corresponding foreign service providers are also to be covered.
The later start of tax withholding is intended to grant the persons obliged to withhold tax a transitional period for the technical implementation of the procedure.
Special rules where acquisition costs are missing
The ministerial draft bill takes into account that not all exchange crypto assets sold or exchanged through a party obliged to withhold tax must also have been acquired there. Cases may therefore arise on a domestic trading platform in which it has no own knowledge of the relevant acquisition costs.
In such situations, the tax deduction is to be made on the basis of the acquisition costs communicated by the taxpayer. § 43a Abs. 2 Satz 17 ff. EStG-E (draft German Income Tax Act) provides for requirements in this regard. In addition, the Bundesregierung (Federal Government), with the consent of the Bundesrat (Federal Council), is to be authorised to lay down further requirements concerning the content and verification of the information provided by the taxpayer.
Only a tax deduction in the correct amount is to have a discharge effect under § 43 Abs. 5 Satz 1 EStG. If the party obliged to withhold tax cannot rely on the taxpayer’s information, an acquisition after 31 December 2026 is to be assumed. In this case, the tax deduction is to be calculated on the basis of 50 percent of the proceeds from the disposal of the exchange crypto assets.
From a professional perspective, it is criticised in this context that current capital gains withholding tax law provides for a substitute assessment basis of 30 percent where proof is lacking, whereas the ministerial draft bill provides for 50 percent for exchange crypto assets.
Political and parliamentary context
Short consultation period and reactions from associations
The deadline for submitting comments on the ministerial draft bill expired on 6 October 2026. Associations and the Länder therefore had only a few full working days to comment on the project. The Bundessteuerberaterkammer (Federal Chamber of Tax Advisers) expressly criticised this short deadline.
Detailed critical statements were submitted, among others, by the Bundessteuerberaterkammer, the Deutsche Kreditwirtschaft, the BVI Bundesverband Investment und Asset Management and the Bitcoin Bundesverband. The Federal Minister of Finance bears political responsibility for the project.
Cabinet consideration and further status
According to the letter from the Bundesministerium der Finanzen to the associations, consideration of the government draft by the Bundeskabinett (Federal Cabinet) was scheduled for 14 October 2026. According to the information available, however, this date passed without a resolution.
The draft therefore remains in interministerial coordination. No new cabinet date is currently known.
Further initiatives in the Bundestag
In parallel with the ministerial draft bill, the Bundestag (German Federal Parliament) considered a competing bill from Bündnis 90/Die Grünen. This draft was rejected in a recorded vote on 8 October 2026. According to the published information, it failed by 445 votes against to 132 votes in favour; a motion by the Die Linke parliamentary group also failed to secure a majority.
In addition, on 12 October 2026, the Petitionsausschuss des Bundestages (Petitions Committee of the Bundestag) considered in a public meeting a petition to preserve the tax holding period for private disposal transactions involving crypto assets. The petition was supported by 44,439 people.
Significance for the tax classification of crypto assets
The ministerial draft bill would bring about a fundamental system change for certain exchange crypto assets. Whereas under the current legal position the holding period under § 23 EStG for private disposal transactions is particularly decisive, under the draft income from capital assets under § 20 EStG is to exist in future.
The planned reform does not affect all crypto assets, but only the exchange crypto assets described in more detail in the draft. At the same time, under the envisaged transitional rule, legacy holdings remain subject to the existing taxation regime.
For companies, investors and high-net-worth private individuals, the further development of the legislative process may have significant tax implications. For legal questions on the classification of crypto assets and the possible effects of the draft, MTR Legal Rechtsanwälte is available in the area of legal advice in tax law.
