Germany’s massive 2027 draft budget hides a crypto tax bomb worth €2 billion
Berlin plans to kill the one-year crypto tax exemption that made Germany a haven for long-term holders, replacing it with a flat 25% capital gains tax on all digital assets.
Germany just revealed the contours of its 2027 spending plan, and the numbers are enormous. Total spending is projected at roughly €543.3 billion, backed by approximately €196.5 billion in borrowing, with around €118.5 billion earmarked for investment.
Finance Minister Lars Klingbeil announced on April 29 that the government plans to reclassify cryptocurrencies as financial securities. The practical effect: a flat 25% capital gains tax on digital assets, regardless of how long you’ve held them. That’s a direct shot at Germany’s current one-year tax exemption, the rule that lets holders sell crypto tax-free after 12 months.
The tax-free loophole is closing
Under the new rules, every sale of a digital asset would trigger a 25% capital gains levy, mirroring how traditional securities like stocks and bonds are already taxed.
Klingbeil’s ministry expects this single change to generate an additional €2 billion in annual revenue.
Why Germany needs the money
Defense spending is projected to hit 3.1% of GDP in 2027, well above NATO’s traditional 2% target. Germany has also committed €11.6 billion to support Ukraine’s defense efforts.
The full cabinet draft is expected to advance in July 2026, with parliamentary approval targeted by the end of the year.