The one-year holding period for crypto assets still applies. Hold Bitcoin, Ether or any other coin as private assets for more than twelve months, then sell, and you pay no income tax on the gain. The federal cabinet did not adopt the draft meant to overturn that rule on October 14, 2026, and no new date has been set. Until a decision is taken, December 31, 2026 remains the date that would separate legacy holdings from new ones under the draft.
Where things stand on October 16, 2026: the one-year rule holds, the cabinet has not decided
Three sentences describe the position in full. First: the law in force is unchanged section 23 of the Income Tax Act, meaning taxation as a private disposal with a tax-free sale after more than a year. Second: the federal finance ministry is holding a departmental draft dated September 30, 2026, which would move crypto assets into income from capital and delete the one-year rule for new acquisitions. Third: that draft is stuck in inter-ministerial consultation and has not passed the cabinet.
The latest decision in this matter is therefore a non-decision. Cabinet consideration had been expected for October 14, 2026; the item does not appear in the results of the session. We recorded that day in detail in our report on the cabinet date that passed. The only fixed date at present is in the Bundesrat’s calendar: the next plenary session after this Friday falls on November 20, 2026, according to bundesrat.de. Without a cabinet decision, parliamentary debate and the approval of both chambers, nothing can take effect for 2027.
For holders, that means one thing above all for now: the draft changes nothing about the 2026 tax return. How the price develops over this period is covered in our Bitcoin analysis; the tax treatment of your sales from this year follows the law in force today, independently of that.
What the departmental draft of September 30, 2026 proposes
A departmental draft is the working version of a law, written by the responsible specialist unit of a ministry. It is not law in force, it does not bind the federal government and it can still change considerably as the process continues. That is exactly what makes it awkward to handle: it contains sections and dates that can be quoted, but none of them has been adopted.
At the heart of the draft is a shift within the statute. Crypto assets are to be treated in future under section 20 of the Income Tax Act as income from capital, instead of under section 23 as other economic goods. The one-year rule falls away with that, and the 25 percent capital gains tax takes its place. The new treatment is to apply only to crypto assets acquired or received after December 31, 2026.
A representative of the federal finance ministry named the purpose himself on October 12, 2026, before the Bundestag’s petitions committee: the ministry is after a “legally secure classification and fair taxation of crypto assets”. In the ministry’s view the classification sits closer to capital investments, hence the proposal to place crypto assets in section 20 rather than section 23. On the state of the process he said one sentence that day which has described the position ever since: “That remains to be seen.”
From private disposal to capital investment: what shifts in the statute
The difference between the two sections decides how much tax is due and how it is collected. Under section 23 as it stands today: gains within the one-year window are taxed at your personal income tax rate, which runs between 14 and 45 percent depending on income. There is an exemption threshold of 1,000 euros for all private disposals in a year taken together, and anyone who crosses that threshold is taxed on the entire gain, not only on the excess. After a year has elapsed, the sale is tax-free, however large the gain.
Under section 20, by contrast, the flat withholding tax of 25 percent applies, plus the solidarity surcharge on the tax and church tax where applicable. The holding period no longer matters. The exemption threshold gives way to the saver’s allowance of 1,000 euros for single filers and 2,000 euros for jointly assessed couples, and that is a true allowance: only the part above it is taxed.
One result of that tends to get lost in the public debate. Anyone trading short term on a high personal tax rate would be relieved by the reform, because 25 percent is less than 42 or 45. The burden would fall on those who hold for a long time, since the tax exemption disappears for them. Petitioner Nicole Nowak made exactly this point before the petitions committee, calling it a “remarkable contradiction”: the reform could relieve “short-term speculators on high incomes” while “long-term savers” carry an extra load.
The shift also changes who remits the tax. With capital income, banks and paying agents usually withhold the tax directly. For trading venues and custodians that would be a new procedure with considerable lead time, and part of the criticism from industry associations starts precisely there. Documentation requirements rise under both models: anyone keeping a complete record of their purchases, sales and swaps today is better placed under the old law and the new one alike.
December 31, 2026 as the cutoff between legacy and new holdings
The most consequential figure in the draft is not the tax rate but the date of application. Under the version to hand, the new rules are to apply only to crypto assets acquired after December 31, 2026. Everything sitting in a wallet or a trading account before that would stay under the old law on this logic, and therefore within the one-year rule. We broke down that grandfathering in detail in our piece on the cutoff date and legacy protection.
In practice the cutoff draws a line through every portfolio funded across the turn of the year. A running savings plan creates its own acquisition, with its own date, at every instalment. Instalments up to and including December would fall under the old law per the draft, instalments from January under the new one. A portfolio funded monthly for years would therefore carry two groups of positions side by side from 2027, each governed by different tax law.
Two caveats belong inseparably to this. First, the cutoff sits in a paper with no force of law, and in earlier tax projects the dates of application have shifted more than once during the parliamentary process. Second, every swap starts a fresh period: moving from Bitcoin into a stablecoin or into another coin is, for tax purposes, both a disposal and an acquisition at once. Rearrange your holdings in December and you may be moving them out of the old regime and into a future one.
From departmental draft to statute: the stages and the open hurdle
The road from an idea in the finance ministry to an amended provision in the Income Tax Act runs through four stages, and each can take time. At the start sits the departmental draft from the specialist unit. Then comes inter-ministerial consultation, in which the other ministries examine the text against their own concerns. If they agree, the cabinet adopts the draft and the departmental draft becomes a government bill. Only then is it introduced in the Bundestag and the Bundesrat, where readings, committee deliberations and finally the approval of both chambers follow.
The project is currently hanging at the second stage. Asked about it, the federal finance ministry said the consultations within government were still running, and named no new date for cabinet consideration. The ministry representative gave the same answer before the petitions committee.
A dropped agenda item is not a retreat. Government projects routinely slip when departments are still arguing over details. The only robust finding at this point is the negative one: there is no cabinet decision, and without it there is no government bill for any parliament to debate.
The timetable can still be worked out. For rules to catch acquisitions from January 1, 2027, the cabinet decision, first reading, committee stage, second and third readings and the passage through the Bundesrat all have to come first. The next plenary session of the Bundesrat after October 16 falls, according to its own calendar page, on November 20, 2026. The longer the inter-ministerial consultation runs, the tighter that corridor becomes, and the more likely a postponement of the application date.
At the petitions committee: 44,439 co-signatures and the ministry’s answer
On Monday, October 12, 2026, the Bundestag’s petitions committee took up a submission in public session calling for the holding period to be preserved. In it, petitioner Nicole Nowak demands that the one-year period not be abolished and that the classification of crypto assets as “other economic goods” under current administrative practice and case law be expressly retained. According to the Bundestag, the petition records 44,439 co-signatures on the petitions platform. We followed the course of the parliamentary process in our piece on the hearing before the petitions committee.
The petitioner justified her submission in the session by saying that Bitcoin is used by entirely ordinary people to build a financial cushion out of small amounts set aside, “for their children, for their retirement or for more financial independence”. For these people, she said, Bitcoin is “not an instrument of gambling or speculation, but a deliberate long-term savings decision”.
Objection came from the accompanying tax adviser and specialist tax lawyer Ingo Heuel, and on the systematic level. Crypto gains do not fit the rules on income from capital. Anyone who wants to stuff them in there regardless, “against the system of the tax code”, has to explain why gold is not stuffed in there too. “I do not find that explanation in the bill so far,” Heuel said, according to the Bundestag’s report on the public session of the petitions committee.
A hearing before the petitions committee does not change tax law. The procedure generates political pressure and forces the federal government into a statement on camera. No final vote of the committee was available on the day of the session; it falls in one of the sessions that follow.
The vote of October 8 concerned a different bill
This is the point at which many reports confuse two processes that point in opposite directions. On October 8, 2026, the Bundestag rejected a bill from Bündnis 90/Die Grünen in a recorded vote, by 445 votes to 132 with no abstentions. That bill wanted to delete the one-year period in section 23 for crypto assets and tax gains at the personal income tax rate regardless of the holding period. The details of the vote are in our report on the vote in the Bundestag.
What was rejected, then, was an opposition proposal, not the federal government’s project. Both aim at the same outcome, namely the end of tax exemption after a year, but they take different routes: the Green bill would have applied the personal tax rate, the ministry’s departmental draft relies on the flat withholding tax. A no to the opposition therefore says nothing about how the same parliamentary groups would vote on a government bill.
Without a purchase record: what the draft’s substitute assessment triggers
Associations and specialists had until October 6, 2026 to send the ministry their comments on the draft. Six calendar days lay between dispatch on September 30 and the deadline. According to reports on its submission, the Federal Chamber of Tax Advisers called that deadline “far too short”; the German Banking Industry Committee considers less than a week inadequate for introducing a new taxation procedure.
On substance, one rule stands out, and it affects investors who have moved their coins across several years and several platforms. Where the selling body does not hold the acquisition data, the draft has the tax deduction calculated from a substitute figure rather than from the actual costs. Potsdam tax adviser Matthias Steger worked through an example in his submission to the ministry in which the deduction exceeds the tax actually owed “by a factor of ten”. The objections in detail are in our piece on the submissions and the substitute assessment.
Tax withheld in excess is not lost for good; it can be reclaimed through the tax return once the acquisition costs are evidenced. The burden of proof then sits with the investor, and the money is tied up until the assessment arrives. Anyone transferring old holdings from one platform to another should therefore document the purchase date, purchase price and quantity independently of the platform. An overview of trading venues and their authorisation in the EU is in our comparison of crypto exchanges.
The dates up to the turn of the year
Four dates determine how the position can develop up to New Year’s Eve. Only one of them is currently open, and it happens to be the most important.
- Cabinet consideration: no date known. The ministry describes the inter-ministerial consultation as ongoing.
- November 20, 2026: the next plenary session of the Bundesrat after October 16, according to the Bundesrat’s own schedule.
- December 31, 2026: the cutoff named in the draft, intended to separate legacy holdings from new ones.
- Vote of the petitions committee: still open, to follow in one of the next sessions.
There is no robust probability for the reform coming about. Surveys and assessments have been circulating for weeks, but a mood produces no legal position.
In this newsroom’s view, December 31, 2026 in its present form is a weak basis for decisions involving larger sums. Three pieces of evidence support that. The cutoff sits in a departmental draft that the cabinet did not adopt on the announced date. The inter-ministerial consultation continues, according to the ministry, with no new date. And the parliamentary corridor to the end of the year contains only one regular Bundesrat session after October 16, on November 20.
Against that stands an argument we will not talk down: delays in inter-ministerial consultation are an everyday occurrence and say little about the outcome. The ministry is sticking to its goal by its own wording, and an application date can also be pushed back during the parliamentary process without abandoning the project. Anyone betting on a pre-emptive purchase for that reason is buying insurance against a risk nobody can quantify, and carrying in exchange the full price risk of an asset that can lose substantial value at any time. Total loss is possible with crypto assets.
The sober middle ground lies in separating what is settled today from what a paper proposes. Settled is the one-year period. Proposed is its end for new acquisitions. Anything you do on the basis of the proposal should still make sense if the proposal never becomes law.
When the route to a tax adviser is the shorter one
Four constellations depend so heavily on the individual case that a general account reaches its limits there. Staggered purchases over many years raise the question of which units count as disposed of on a sale. Staking and lending income accrues at its own moment and is initially recorded as other income. Transfers between your own wallets are not a disposal, but they have to be recognisable as such to the tax office. And with holdings from a time without complete records, the documentation decides which acquisition costs are recognised at all.
In these cases a tax adviser is cheaper than a wrong approach in the return, regardless of how the reform turns out. The duty to file correctly exists already.
Crypto holding period: the one-year rule applies until the cabinet decides
- Secure your records, independently of the platform. Pull the purchase date, purchase price and quantity for every position from your trading account and file the statements where you will still find them after changing provider. Which tool automates that and what it costs is in the comparison of crypto tax software.
- Know the acquisition dates of your running purchases. Every savings-plan instalment and every swap gets its own date, and every swap starts a new one-year period. If you want to adjust instalments before the turn of the year, the terms are in the comparison of Bitcoin savings plans.
- Match trading venue and authorisation. Under the draft, the tax deduction would hinge on which data the selling body holds. Which providers are authorised in the EU and what data they keep is shown by the comparison of crypto exchanges.
You can read the wording of the provision in force today for yourself: section 23 of the Income Tax Act governs private disposals and therefore the one-year period.
(As of October 16, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)