Is this the end of the holding period? What Germany can learn from Austria now
Germany is facing the biggest tax shift for Bitcoin investors since the one-year holding period was introduced. The 2027 budget draft signals that cryptocurrencies may soon be taxed like capital assets. I now consider implementation highly likely; in my view, the probability is around 90 percent. The question is no longer whether this will happen, but how.
We in Austria have already been through this process. That is precisely why I want to explain what German investors may be facing and what can already be prepared today.
A system change, not a tax increase
Reducing the debate to the abolition of the holding period understates what is happening. So far, cryptocurrencies in Germany have been treated for tax purposes as other economic assets. Reclassifying them as capital assets would change the basic logic of tax law: Bitcoin would for the first time fall into the same category as shares and bonds.
From a doctrinal perspective, that is open to challenge. Traditional capital assets generate recurring income — dividends, interest, the so-called fruits of capital. Bitcoin pays none of that. In its fundamental characteristics, Bitcoin resembles gold or other scarce goods more than a financial instrument. Whether the legislature merely wants to tax Bitcoin like capital assets or actually classify it as such may sound technical, but it has major systematic consequences, including constitutional questions around equal treatment.
The view from Austria
Austria already implemented capital-asset taxation for crypto as part of the eco-social tax reform. The starting point was very similar to Germany’s, and Austrian income tax law is historically based largely on German law.
Three lessons seem especially relevant:
There is no permanent protection of legitimate expectations. The Austrian Constitutional Court gave the legislature very broad discretion. Taxpayers cannot rely on tax laws remaining unchanged. Only genuine retroactivity is taboo, meaning retroactive taxation of facts that have already been fully completed. Anyone buying in Germany today and betting on the holding period in a few years should be aware of that.
Revenue lagged behind expectations. Capital-asset taxation usually comes with withholding at source, meaning the platform withholds the tax and remits it. That works smoothly with shares because the securities market is a closed system. Crypto is the opposite: self-custody, wallet transfers, DeFi. Correctly determining acquisition costs across platforms is technically extremely demanding. Even large providers had to invest heavily, and international exchanges are still struggling with implementation.
Not everything was bad. Crypto-to-crypto transactions remain tax-free in Austria. A reform can also bring detail improvements, provided practice is taken into account.
The paradoxical distribution effect
It is striking whom the reform hits and whom it relieves. Long-term investors — those who hold Bitcoin for wealth accumulation or retirement — lose their biggest tax advantage. Active traders, who previously paid up to 45 percent income tax on gains, could even be better off under a flat capital gains tax.
Politically, this would favor short-term speculation while disadvantaging long-term investing. That constellation is at least worth debating, and it shows that a political decision is being justified by tax law, not the other way around.
The open questions: grandfathering and cut-off dates
Transition rules are crucial for investors. In the best case, holdings already kept for more than a year remain permanently tax-free, and only new purchases fall under the new regime. But it is also conceivable that the legislature argues that, once the planned change was announced, the legal shift was foreseeable and sets a retroactive cut-off date. Then even purchases from summer 2026 might no longer fall under the old holding period.
Which version will come cannot be predicted reliably at this point. That makes it even more important to follow the legislation closely over the coming months.
What investors should do now
Regardless of the outcome of the reform, there is one measure that always pays off: complete documentation of all crypto transactions.
This history is no longer needed only for tax purposes. Exchanges, banks, and notaries increasingly require seamless proof of origin, including proof of funds and anti-money-laundering documentation. Anyone who only starts rebuilding wallets, exchange accounts, and transactions when large gains are to be realized or assets transferred loses time and risks problems.
At the same time, the risk of simply failing to explain gains continues to rise. International reporting obligations will be expanded again from 2027, and data exchange between authorities will become more automated and comprehensive. Anyone who made mistakes in the past should act early; tax law offers ways to make a subsequent disclosure, provided the transaction history can be fully reconstructed.
One more point on the much-discussed topic of moving abroad: changing residence is not a short-term tax optimization, but a far-reaching life decision. Your center of life must actually move with you. And if Bitcoin were to be treated as capital assets in the future, the question would inevitably arise whether exit taxation would also apply.
My conclusion
Austria’s experience shows that a tax reform does not end with the legislative decision. Only the practical implementation determines its real consequences for investors, service providers, and the industry as a whole. German investors should do two things: closely watch political developments, especially the cut-off-date rules, and integrate tax considerations into every investment decision from the outset.
Anyone who sets up documentation properly today will be prepared for any scenario.