Criticism of SPD demand –
De facto abolition of the one-year holding period for Bitcoin sales
As the Bitcoin Bundesverband, we represent the interests of Bitcoin companies in Germany and the EU. We are extremely critical of the SPD’s call to tax income from cryptocurrencies in the same way as capital gains in future, as this would effectively abolish the one-year holding period for private individuals and lead to greater legal uncertainty for citizens and companies.
This would eliminate a major incentive for long-term Bitcoin holding and investing and instead favor short-term trading activities – with potentially higher risk for investors. This would be a turnaround from the previous policy, which focused on limiting speculation (see the previous justification for limiting losses on futures transactions).
It remains unclear what positive effects the SPD sees in a tax cut for short-term speculation. In future, this would be taxed at up to 15.825 percentage points less than under the current system (highest personal income tax rate incl. solidarity surcharge: 47.475% instead of new capital gains tax incl. solidarity surcharge: 31.65%), which could lead to considerable tax losses in the short term.
As existing portfolios are to be excluded from the new regulation due to the ban on retroactivity, this problem is likely to be exacerbated: Long-term investors would then have an incentive to hold on to their portfolios, eliminating the planned “counter-financing” of the tax reduction. Instead of additional tax revenue, this would lead to reduced tax revenue in the short and medium term.
Such a regulation would have the following negative effects, particularly for companies:
1. restriction of payment transactions
Bitcoin is increasingly being used as an efficient and international means of payment. Stricter taxation reduces the incentive to make payments and transactions in Bitcoin, as any use of new holdings would be directly taxable. This creates considerable uncertainty and bureaucratic hurdles for users and companies, inhibits the spread of a modern payment infrastructure and hinders innovation in the financial sector. It also devalues investments that have already been made.
2. higher administrative and audit costs
The requirement would mean a considerable amount of additional bureaucracy. Every Bitcoin payment would have to be precisely documented, which would not only place a burden on the tax authorities, but would also require a disproportionate amount of administrative work from citizens.
3. reduced competitiveness
Bitcoin offers companies potential growth opportunities and access to global markets. A higher tax burden compared to other countries in the EU and at a global level with more favorable crypto tax rules weakens Germany as a location for innovation. Companies could relocate or switch to other jurisdictions in order to continue their activities.
We appeal to political decision-makers to recognize the special role of Bitcoin as a global, decentralized payment system and to consider the negative consequences of a flat-rate 30% tax. Only in this way can Germany remain competitive as a location for innovation and business in the Bitcoin sector and benefit from the advantages of Bitcoin technology.
In our view, the previous regulation, which has been in place for over a decade, of treating Bitcoin as fiscally equivalent to transactions involving the sale of gold or foreign currencies is the correct way to handle the situation. From a tax law perspective, Bitcoin cannot and should not be treated in the same way as capital gains, as it does not have essential characteristics such as the possibility of distributing dividends. This would violate the constitutional requirement that the same should be taxed equally.
Download PDF: https://cloud.bitcoin-bundesverband.de/s/9sLEtKrQC52NBbg
