- Tax-free profits
- Why the parties want to ban it
The Left Party and Alliance 90/The Greens want to abolish the tax-free holding period for Bitcoin, according to a report by a local media outlet.
These parties argue that huge profits are being generated with the help of crypto (roughly €47 billion in 2024 alone), but much of it is untaxed due to the rule.
Tax-free profits
In Germany, the cryptocurrency assets of the likes of Bitcoin and Ethereum are treated as private assets (similar to collectibles).
If one sells crypto within a year, any profit one maked is considered taxable income. However, if one holds crypto for more than a year, the profit is actually tax-free.
Notably, the same rule, which is meant to encourage long-term investment, also applies to gold, collectibles and gold.
Why the parties want to ban it
In their respective motions for resolutions, the German Left and the Greens argue that tax-free cryptocurrency holding is outdated and unfair.
They insist that cryptocurrencies should be taxed like stocks, with investors paying taxes on capital gains even if their holding period exceeds one year.
Isabelle Vandre, a member of the Bundestag from the Left Party, has stated that most German crypto holders do not pay taxes. “Do you know how many of the 7 million crypto users are currently fulfilling their tax obligations? It’s exactly 3 percent,” she said.
Apart from the two aforementioned parties, some members of the SPD also support such a measure.
Meanwhile, the far-right AfD party is opposing the implementation of the anti-Bitcoin tax reform. The position of the pro-business conservatives from the CDU is currently unclear, but they are likely to oppose the tax reform aimed at hurting crypto.
Source: https://u.today/german-parties-propose-crushing-bitcoin-tax-benefits
