The German Bitcoin Association has submitted its official statement on the Federal Ministry of Finance’s draft bill regarding the “Reform of the Taxation of Certain Cryptocurrencies in Private Assets.”

The draft proposes a fundamental change to the tax treatment of Bitcoin and other so-called “exchange-based cryptocurrencies.” For holdings acquired or received after December 31, 2026, the current tax treatment under Section 23 of the Income Tax Act (EStG) will no longer apply. Instead, such income will in the future be classified as income from capital assets under Section 20 of the Income Tax Act (EStG).

In its statement, the German Bitcoin Association advocates retaining the one-year holding period for Bitcoin held directly as part of private assets. From the association’s perspective, the existing tax framework should not be hastily replaced by a complete overhaul of the system. Instead, existing enforcement tools should be improved, new reporting data should be analyzed, and outstanding practical questions should first be clarified in a reliable manner.

A key focus of the statement is the question of whether the reasons cited by the Federal Ministry of Finance for excluding Bitcoin from the existing system are in fact sufficient. The draft bill cites, among other things, speculative use, high liquidity, and the absence of wear and tear. The German Bitcoin Association contrasts this, among other things, with physical investment gold and calls for a clear justification for the different tax treatment of assets held for the long term.

In addition, the statement addresses numerous practical implications of the proposed system change. These include, in particular, the planned taxation regardless of the holding period, the use of substitute values for tax withholding when acquisition data is missing, the treatment of existing holdings, gifts, and inheritances, as well as unresolved issues regarding lending, staking, and so-called transaction processing.

The German Bitcoin Association also attaches particular importance to the implications for the use of Bitcoin as a means of payment. If the holding period for new holdings is eliminated, even an everyday Bitcoin payment could, in principle, remain a tax-relevant disposition on a permanent basis. This could give rise to extensive documentation and valuation requirements. The association is therefore calling, among other things, for a practical de minimis rule for private payments for goods and services.

From the perspective of the Bitcoin Federation, the impact assessment must also be significantly broader. It should take into account not only the costs to the tax administration and those associated with tax withholding, but also the potential burdens on exchanges, trading platforms, custodial service providers, wallet providers, tax and accounting software, Bitcoin and Lightning payment providers, as well as online stores and other businesses that accept Bitcoin as a means of payment.

The statement also addresses the social and political debate surrounding the holding period. The Bitcoin Bundesverband is part of the ProHaltefrist initiative, which advocates for maintaining the current tax treatment.

Jens Leinert took the lead in drafting this statement on behalf of the Bitcoin Bundesverband. Peter Rochel reviewed the draft for content and further refined it in several places. The tax-related sections were also reviewed by Dr. Ingo Heuel, and his comments were incorporated into the final version.

The Bitcoin Federal Association is making the full statement available in its original form in a transparent manner.

Download the Bitcoin Federal Association’s statement on the BMF draft bill as a PDF

The German Bitcoin Association will provide technical guidance throughout the remainder of the legislative process and will continue to advocate for a legally certain, practical, and innovation-friendly tax treatment of Bitcoin in Germany.