German FDP Politician Slams Plan to Scrap Crypto Tax-Free Holding Period as "Breach of Trust"

Germany's one-year tax exemption for crypto gains, long seen as one of the more investor-friendly features of the country's tax code, is facing abolition under a draft from the federal finance ministry. FDP politician Frank Schäffler has now gone public with sharp criticism of the plan, warning that it would treat long-term bitcoin investors the same as short-term traders and calling on the crypto community to resist the change while there is still time.

"The abolition of the holding period is a profound breach of trust and confirms all the prejudices against a voracious state," Schäffler said in an interview with BTC-ECHO. He argued that anyone who bought crypto assets under the current legal framework must be able to rely on it continuing to apply, pointing to a ruling by the Federal Constitutional Court on the retroactive extension of the speculation period. "Anyone who bought in reliance on the applicable legal situation must be able to rely on it. The Federal Constitutional Court has drawn clear limits on the retroactive extension of the speculation period (BVerfGE 127, 1)," he said.

The draft does provide for a cut-off date at the end of 2026, after which existing holdings would retain grandfathered status — a provision Schäffler welcomed. There is, however, no agreed cabinet draft yet, which he said leaves room to stop the measure altogether. "But it's better if this whole nonsense is prevented. And that's still possible, since there is no agreed cabinet draft yet. So my appeal to the community: write to the members of parliament from the governing factions and protest against this draft law," Schäffler said. He also warned of a broader chilling effect: "Every saver would then have to ask themselves what comes next," adding that wealthy investors and founders "look very carefully at where they are welcome" and that "the hoped-for additional revenue is likely to prove to be pure paper accounting."

Legal and fiscal doubts

Elias Tück, a business lawyer and certified adviser on crypto assets and tax at the LHP-Gruppe, backed the constitutional objection. "Frank Schäffler has a point with constitutional weight: the legislator may tax Bitcoin differently than gold, but only with a sound factual reason. I don't see that in the current draft," Tück said. He drew a contrast with the 2009 shift of shares and other securities from Section 23 of the Income Tax Act into the flat-rate withholding tax, which he said followed clear systemic logic. "Like gold, Bitcoin has no issuer, pays neither dividends nor interest, and represents no claim against a third party. Structurally, it stands on the side of gold, not on the side of stocks," he said.

Tück also questioned the revenue estimates circulating around the reform, which range from the Greens' initial estimate of roughly €5 billion — based on a Frankfurt School calculation using data from just over 10,000 accounts at a tax-software provider, later halved — to finance minister Lars Klingbeil's April figure of €2 billion covering financial and tax crime enforcement more broadly, down to the finance ministry's own projection in the draft of around €350 million a year once the reform takes full effect. "When estimates differ by more than a factor of ten, that's no longer a range, but proof that nobody has reliable figures. The billion-euro numbers essentially take the realized gains of a strong market year and pretend they would be subject to income tax starting tomorrow," Tück said.

He noted that under the draft, old and new holdings would be taxed under separate rules for years to come. "For many years, two regimes would run in parallel: old holdings under Section 23 of the Income Tax Act with a holding period, new holdings under Section 20 of the Income Tax Act, cleanly separated from each other," he said. The draft also does not yet put a figure on the cost of adapting systems at banks and crypto exchanges, Tück said, while the Bundessteuerberaterkammer has recommended first waiting for data from the EU's DAC8 reporting regime. "Deciding on a reform beforehand on the basis of projections needlessly forgoes the first systematic data basis that the tax authorities will get in this area," Tück said.