Germany's long-standing tax perk for crypto investors is under renewed scrutiny, with the Social Democrats (SPD) setting out their reasoning for scrapping the rule that lets gains on certain crypto assets go untaxed after a one-year holding period. In an interview with BTC-ECHO, SPD politician Parsa Marvi laid out why his party and its coalition partner want to bring crypto taxation closer in line with how other capital income is treated.
The current regime allows disposal gains from certain crypto assets to escape tax entirely once an investor has held them for a year. Interest, dividends and share gains, by contrast, are generally taxed regardless of how long they have been held. The Bundestag recently debated a public petition calling for the one-year rule to be preserved, underscoring how contentious the issue has become among retail investors.
"For us Social Democrats, tax justice is at the center of the reform. We have therefore agreed with our coalition partner to treat gains from crypto assets and other capital income more equally for tax purposes," Marvi said. He added: "Under current law, disposal gains from certain crypto assets can remain tax-free after a one-year holding period has elapsed. Interest, dividends and gains from shares acquired today, on the other hand, are generally taxed regardless of the holding period. We consider this different treatment to be in need of review."
Marvi was careful to distinguish the plan from simply treating crypto like equities. "Our goal is a modern and internally consistent taxation of crypto assets. This is not about economically equating Bitcoin or other crypto assets with shares. Rather, what matters is treating realized asset gains in a tax-transparent manner that is appropriate in relation to other capital investments," he said.
Transition rules and scope still open
Marvi acknowledged that many investors had made decisions based on the existing legal situation. "We are aware that many investors made their decisions based on the current legal situation. That is why protection of legitimate expectations and planning security are important when designing a new regulation. In the further process, it must therefore be carefully examined whether and to what extent transitional and grandfathering rules are warranted and sensible. At the current stage of the legislative process, however, I cannot yet make any further reliable statement regarding the specific design," he said.
He also flagged the question of which assets would fall under any new rule. "Crypto assets differ significantly from one another in some cases. Therefore it must be clearly and legally certainly determined which forms of digital assets are covered by the new taxation (e.g. exchange tokens)," Marvi said, noting that incoming EU reporting rules under DAC8 and Germany's Crypto Asset Tax Transparency Act would improve the information available to tax authorities without themselves creating new substantive tax provisions.
Not necessarily a heavier burden
Marvi pushed back on the assumption that the change would simply mean higher taxes for everyone. Gains realised within the current one-year window are typically taxed at the personal income tax rate, he noted, whereas taxation under the capital income system could generally involve a rate of 25 percent — meaning the net effect, once losses are factored in, is not straightforward. He also stressed that Germany's attractiveness for innovative technologies needs to be weighed, while maintaining that tax-free status after a holding period is not a precondition for supporting new business models.
The proposal, which could take effect in 2027, remains at an early stage. "After coordination by the federal government, the draft is to be coordinated with all ministries. It is not yet part of a parliamentary procedure," Marvi said.
