Bitcoin tax: the sleight of hand behind the debate

With the presentation of the key points for the 2027 federal budget, Vice Chancellor and Finance Minister Lars Klingbeil has taken the topic of Bitcoin and crypto taxation to a new level. For the first time, the “changed taxation of cryptocurrencies” is explicitly mentioned in connection with the federal government’s budget planning. The SPIEGEL report on the key figures states that, among other things, a change in the taxation of cryptocurrencies is planned to generate additional revenue. At the same time, the Ministry of Finance points out that it has not yet put a concrete price tag on individual measures and refers to ongoing negotiations within the coalition.

This is politically explosive. After all, the coalition agreement between the CDU, CSU and SPD is based on the promise to reduce taxes, duties and energy prices. If a new fiscal burden is now being prepared for Bitcoin and cryptocurrencies of all things, the political trick is obvious: the measure is not intended to appear as a classic tax increase, but as an act of tax justice, the fight against tax crime and the closure of allegedly “lost” revenue. This is precisely where the sleight of hand lies.

Finance Minister Lars Klingbeil says:

“…that state revenues are strengthened by allowing less to escape. We are declaring war on tax fraudsters, we want to make progress in the fight against financial and tax crime, we want to tax cryptocurrencies differently, I want to protect everyone who plays by the rules.”

What is particularly problematic here is the tone in which the topic is presented. According to the wording you quoted, Klingbeil said at the federal press conference on April 29 that the aim was to strengthen state revenues, fight tax fraudsters, combat financial and tax crime and tax cryptocurrencies differently in order to protect those who play by the rules. The coalition has also agreed to spend two billion euros on combating financial and tax crime/crypto taxation. This parenthesis alone is politically revealing: crypto taxation is not treated as a normal individual tax policy issue, but is communicatively placed in close proximity to fraud, crime and rule-breaking.

“We have agreed that we will reach two billion [euros] in the area of combating financial and tax crime/crypto taxation.”

Crypto tax as a substitute term for tax increase

It is precisely here that we can see how the political framing works. If a new burden were openly described as a tax increase, it would be in tension with the coalition’s promises of relief. If, on the other hand, the same measure is sold as a fair collection of previously “lost” revenue, the impression is created that the state is merely taking back what it is entitled to anyway.

However, this is not a neutral description, but already a political assessment. This is because, according to the current legal situation, the tax treatment of Bitcoin in Germany is by no means a legal vacuum. The Federal Ministry of Finance recently reaffirmed its basic line in a revised BMF circular dated March 6, 2025: Profits from privately held crypto assets are generally treated as private sales transactions; within the holding period they are taxable, after the period has expired they may be tax-free. This is applicable law – not a loophole, not a breach of the rules and certainly not evidence of tax crime.

Anyone who now presents this current legal situation politically as if it were a matter of “lost” revenue from an area that is mentioned in the same breath as financial and tax crime is deliberately shifting the debate. It is not the state that is generously forgoing revenue that is actually due, but the federal government that is considering changing the current legal framework and implementing a system change.

The two billion figure is not proof of the big windfall

There is also a second important point: even in the German government’s political communication, two billion euros now appears as a target – for the entire area of financial and tax crime plus crypto taxation. That in particular is remarkable. Because it indirectly shows how questionable the previously circulated fantasy figures of 11.4 billion euros in potential additional tax revenue from crypto taxation were. If the Federal Ministry of Finance itself mentions a combined total amount for a much larger block of measures, this rather speaks against the idea that Bitcoin and cryptocurrencies alone could be expected to deliver a budgetary liberating blow.

The SPIEGEL report also shows that the Ministry of Finance deliberately does not yet want to put a price tag on individual measures. This suggests that the fiscal substance of many projects is still uncertain internally. It would be all the more problematic to restructure a politically and technologically sensitive area such as Bitcoin with grand gestures, even though the actual revenue effects are open or possibly manageable.

Austria shows how quickly great expectations can become small

A look at Austria is instructive in this context. Since March 1, 2022, a regime of income from capital assets with a special tax rate of 27.5% has applied to cryptocurrencies there. The Austrian Ministry of Finance expressly describes this inclusion in the taxation of capital assets as the current legal situation.

It is not easy to confirm every revenue figure circulating on social media from easily verifiable primary sources. But what can be said is very clear: Austria is often cited by proponents of reform as a model for “modern” equal treatment of crypto and traditional financial assets. At the same time, additional complexity, operational burdens and evasive reactions are repeatedly pointed out in practice. The Austrian system alone shows just how far-reaching such a reform would be – including capital gains tax logic, new deduction mechanisms and additional reporting and enforcement issues.

For Germany, this means that even if one believes the optimistic fiscal expectations, it is completely unclear whether the yield will ultimately be in reasonable proportion to the damage that such a reform would cause.

Why Bitcoin would be particularly affected

Politically, there is often blanket talk of “cryptocurrencies”. In reality, however, a system change would not affect all segments equally.

Short-term trading in altcoins, memecoins or highly speculative tokens often takes place within short periods of time anyway. Anyone who regularly trades in such assets is typically already in the taxable area because the relevant holding periods are not even reached. Particularly where crypto is primarily used as a short-term gambling or trading asset, the practical change resulting from the abolition of the holding period is therefore often less significant.

Bitcoin is different. Bitcoin is not seen by many users as a short-term trading vehicle, but as a long-term store of value, a savings instrument and a building block for private financial provision. It is precisely this long-term holding that is favored by the current legal situation. If the holding period were to be abolished and Bitcoin were to be permanently taxed in the same way as traditional investment income in future, this would primarily affect those who save for years, bear the risk of volatility and do not speculate in the short term.

In other words, the reform would hit the group that is most likely to stand for long-term wealth creation, personal responsibility and financial provision particularly hard.

Bitcoin is not a classic capital security

There is also a factual objection that is regularly blurred in the political debate: Bitcoin is not simply the same economically as a share, a savings book or a dividend-paying investment. There is no issuer, no ongoing cash flow and no fixed debtor. In its letter, the Federal Ministry of Finance itself distinguishes between different types of crypto assets and describes payment tokens such as Bitcoin as crypto assets that are used as a medium of exchange but are also held for speculative purposes. It follows from this alone: A classification “like interest and dividends” is not a neutral matter of course, but a deliberate political reorganization.

For this very reason, a switch to capital gains tax would not be a mere technical adjustment, but would set a course with a significant signal effect: Bitcoin would be removed from the logic of private sales transactions for tax purposes and forced into a different regime – although its economic nature is only suitable to a limited extent.

A bad policy for little return

The really frightening thing about the current debate is therefore not just the fiscal idea itself, but the willingness to accept political and technological damage in return for possibly limited additional revenue.

If even the German government only refers to crypto taxation in its communication as part of a larger package of crime prevention and tax enforcement and has earmarked a total of two billion euros for this, then it is obvious that there is no reliable cash cow waiting for the federal budget. At the same time, the political price would be high: Germany would make long-term Bitcoin savings less attractive, weaken private provision, send an important innovation signal against open monetary technologies and place an entire group of users under general suspicion.

For a government that also talks about innovation, competitiveness and future technologies, this would be a fatal signal.

Conclusion

The current debate about the Bitcoin tax is more than just a technical tax issue. It shows how a federal government is trying to frame a potential new burden not as a tax increase, but as a question of justice, combating crime and lost revenue.

This is precisely the political sleight of hand.

Bitcoin is not tax-free in Germany today because the state looks the other way, but because this is exactly what the current legal framework provides for after a certain holding period. Anyone who wants to change this legal framework should openly state that they are making a new tax policy decision – and not pretend that they are merely taking action against tax fraudsters.

It is the long-term Bitcoin savers who would be particularly affected, not the short-term gamblers. And that is precisely why this debate is about more than just a few extra millions or billions for the budget. It is about the question of whether Germany sees Bitcoin as a technology of the future, a savings instrument and an expression of financial responsibility – or whether it is prepared to damage all of this for a potentially manageable fiscal return.