First, because it matters: this is not tax or legal advice. I am writing about what is currently being debated politically and what I, as an entrepreneur, make of it, not about what you should put in your tax return. For concrete cases, a tax advisor belongs in the room. Even so, it is worth a look, because in 2026 a rule is wobbling that many crypto investors in Germany treated as sacred.
I am talking about the one-year holding period. It is the reason Germany was comparatively attractive for private crypto investors despite otherwise high taxes. That very rule is now on the table.
More on this topic: Finance & Crypto Assets – background, practice and every article in one place.
What still applies today
As things stand, private crypto gains in Germany are tax-free if you have held the coins for more than one year. The legal basis is Section 23 of the Income Tax Act, which governs private disposal transactions. If you sell within a year, the gain is taxable at your personal income tax rate, but a tax-free threshold of 1,000 euros per year applies. You can read the statute yourself, for example at gesetze-im-internet.de. Important: this situation applies fully, as long as no new law has been passed.
What is being debated in 2026
In early July 2026, Federal Finance Minister Lars Klingbeil presented a budget draft that, among other things, envisions abolishing the crypto holding period. The federal cabinet approved the draft. That sounds dramatic, but for now it is only a rough proposal within budget planning, not a finished law. Notably, the actual Annual Tax Act 2026 does not yet contain the change at all. Between a political statement of intent and applicable law lies the full parliamentary process.
The models on the table
Option one: Crypto remains a private disposal transaction, but the tax exemption after one year is removed. Gains would then be taxed at your personal income tax rate regardless of how long you held.
Option two: Crypto is put on a par with stocks for tax purposes. Then the flat capital gains tax of 25 percent plus solidarity surcharge and, where applicable, church tax would apply, while the holding period and the small tax-free threshold would fall away. Key questions remain open, such as possible grandfathering for existing holdings and the offsetting of losses. It is exactly these details that will decide in the end who is affected and how strongly.
How I read this
I have no time for fearmongering. You should neither sell in a rush because of a headline nor ignore the debate entirely. What I have learned as an entrepreneur: political announcements and applicable law are two different things, and there are often months between them. At the same time, it is unwise to pretend nothing will ever change. Anyone who holds crypto seriously should document their transactions cleanly and follow the developments. Why I consider 2026 a pivotal year anyway I wrote down in Crypto 2026, what remains.
What you can concretely do now
First, stay calm and know the facts: today the old rule applies, full stop. Second, get your documentation in order, meaning purchase dates, prices, and holding periods recorded cleanly, because you will need this in every scenario. Third, for larger holdings, speak with a tax advisor early rather than improvising later. And fourth, see the debate in context, it is part of a bigger shift in how the state treats digital assets. I bundle more on that in my section Crypto and finance.
Frequently Asked Questions
Does the one-year holding period for crypto still apply in 2026?
Yes. As things stand, private crypto gains are tax-free after a holding period of more than one year, governed by Section 23 of the Income Tax Act. As long as no new law has been passed, this rule remains fully in force.
Will the crypto holding period really be abolished?
There is a political proposal from the budget draft of July 2026, which the cabinet approved. But that is not a finished law, and the change is not yet in the Annual Tax Act 2026. A real change requires the full parliamentary process.
What would change for investors if the period falls?
Two models are being discussed: either taxing gains at your personal income tax rate regardless of the holding period, or aligning crypto with stocks and thus applying the 25 percent flat capital gains tax. Questions such as grandfathering and loss offsetting remain open.
Is this article tax advice?
No, explicitly not. It is about framing the public debate, not a recommendation for your individual case. For concrete tax questions you should consult a tax advisor.
Warm regards,
Dennis Weidner
