An attempt to increase the tax burden on cryptocurrency owners in Germany has not gained enough support in the country’s legislature.
Most parties opposed a bill put forward by the Greens, who wanted to target the tax-free profits from long-term digital-asset investments.
Greens’ crypto tax proposal halted in parliament
The draft law, designed to stiffen taxation for cryptocurrency investors, was stopped in the Finance Committee of the Bundestag, the lower house of the German parliament.
Submitted by the parliamentary group of the Alliance 90/The Greens party, it was backed only by Die Linke (the Left Party) faction, according to a notice published by the chamber.
The sponsors of the legislation sought to put an end to tax-free profits from the trading of digital currencies like Bitcoin and Ethereum, BTC Echo highlighted in an article.
Under the Federal Republic’s current regulations, capital gains from the sale of coins held for more than a year after purchase are not taxed. The “holding period” rule remains in place, for now.
The Greens, who considered this unjustified, insisted that crypto assets should be treated similarly to other investments, the leading German crypto news outlet explained further.
However, critics of their stance say that under the proposal, crypto investors would have been taxed more than those who put money into regular stocks, for example.
Ruling German parties oppose the Greens’ tax bill
According to lawmakers from the group of the CDU/CSU center-right political alliance of German Chancellor Friedrich Merz, the law drafted by the Greens wasn’t closing any loopholes.
On the contrary, the members of the ruling majority fear it would have created new ones, as it envisages taxing cryptocurrencies differently from traditional assets such as precious metals or foreign fiat currencies.
The far-right Alternative for Germany (AfD), the main opposition force in the Bundestag, insisted that the government should focus on taxing fewer things, rather than searching for new sources of revenue.
To achieve that, the populist faction suggested limiting the state’s role to maintaining its core functions, such as providing security and administering the justice system.
The Social Democratic Party (SPD), the junior coalition partner of the Christian Democrats in the federal cabinet, is generally in favor of heavier crypto taxation.
But its representatives in the parliament want to postpone the adoption of the necessary amendments until their Finance Minister Lars Klingbeil presents his own proposals on the matter.
Greens wanted to tap into billions in crypto profits
While suggesting their legislation, the Greens claimed that the tax exemption for cryptocurrency gains was originally introduced with other assets in mind, such as antiques put up for sale after long storage.
The party’s legislators also hoped to boost budget revenues by at least half of the expected €11.4 billion in additional tax revenue, according to an estimate produced by the Frankfurt School of Finance.
Die Linke, which supported their bill after recently calling for reform, insisted that existing injustices in the taxation of crypto assets must be ultimately overcome, despite the weaknesses of the Greens’ draft.
Among them, the risk of increased bureaucracy and the lack of a limit for offsetting losses from cryptocurrency transactions, which would have resulted in a loss of revenue for the state coffers.
Even without the tax changes, Germany has been ramping up pressure on crypto investors lately to duly declare their profits, as reported by Cryptopolitan earlier this year.
One of the new measures to improve the accuracy of information on tax returns is to oblige crypto service providers to collect and submit details about clients and their transactions to the tax office.
The requirement stems from the enforcement of the European Union’s DAC8 directive in the Bundesrepublik, which entered into effect on January 1, 2026.
