Germany could change its crypto tax rules from 2027, and the biggest target could be the famous one-year holding rule.

Under the current rules, private investors generally pay no tax on crypto profits if they hold their coins for more than one year before selling.

This has made Germany quite attractive for long-term Bitcoin holders.

But the German government is looking for more tax revenue and wants to collect around €2 billion in additional revenue through crypto taxation and measures against financial and tax crime.

The government has not officially said that the one-year rule will be removed, but German crypto industry groups believe it is one of the most likely targets.

And I think this is a huge mistake.

To me, this looks like a desperate German government trying to find more and more ways to get money from people and businesses while the economy is struggling.

The consequences could be big.

If Germany removes the tax-free one-year holding period, some big crypto players and investors could simply move to more attractive countries.

And Germany is already losing ground in other areas. We have seen companies and tech talent looking at countries like Spain, Poland and other Eastern European countries because operating costs, bureaucracy and regulation can be much more attractive.

What should Germany do instead?

Germany should focus on making it easier to start a company, run a one-person business and build a startup instead of constantly looking for new ways to squeeze more money out of them.

It should also focus on closing the leaks in its social system and dealing much harder with people who abuse social benefits. The government itself has recently introduced a plan targeting large-scale social-benefit abuse and fraud.

The government should also rethink its approach to Germany's failing and outdated infrastructure and actually follow a proper renewal plan. Look at Berlin Brandenburg Airport. It was originally expected to open in 2011 but finally opened in 2020 after years of delays and massive cost increases.

Germany cannot keep making it harder for businesses and investors while expecting the economy to magically grow.

Final thoughts

In my opinion, killing the crypto tax advantage would be another lost opportunity.

Instead of asking “How much more can we tax?”, Germany should be asking “Why are investors and companies choosing to go somewhere else?”

I don't think this will help the German economy.

Quite the opposite. I think it could make things even worse.