Crypto future in danger: SPD plans to abolish tax exemption for Bitcoin – AfD speaks of a death knell” for the industry

Crypto future in danger: SPD plans to abolish tax exemption for Bitcoin – AfD speaks of a death knell” for the industry

SPD plans to abolish the one-year deadline for crypto tax exemption

In the current coalition negotiations between the SPD and the CDU, the one-year deadline for tax exemption for cryptocurrencies is in jeopardy. Previously, investors who held Bitcoin, Ether and other digital currencies for at least a year were able to realize their profits tax-free. However, the SPD plans to abolish this regulation and thus extend taxation to private capital income.

Tax policy and its impact on the crypto community

According to a protocol from the coalition negotiations, the SPD intends to increase the withholding tax rate on private capital income to 30 percent. In addition, income from cryptocurrencies will in future be taxed like conventional capital income. However, such measures were not announced in the SPD's election program, which is causing concern among many in the crypto scene.

Opposition to the SPD plans

The SPD's plans are encountering resistance not only in the crypto community, but also from the political opposition. The AfD criticizes the plans as a “death knell for Bitcoin” and warns of a serious interference with citizens’ financial freedom. Bundestag member Dirk Brandes expresses concerns that the SPD is endangering trust in Germany as a crypto location and threatening investments and jobs in the industry. Brandes also calls for the one-year deadline to be retained as well as the right to mine Bitcoin and manage digital assets independently.

Future of Germany as a crypto location

If the SPD implements its plans, every transaction with cryptocurrencies would be taxable. This could set Germany back further in the global competition for crypto investments, while countries such as Portugal, Switzerland and Great Britain score points with more liberal regulations. The possible upcoming digital euro, which will be introduced in October, could further increase the pressure on crypto investors and make cryptocurrencies effectively unusable as a means of payment in Germany.

Additionally, greater taxation could lead to short-term investment behavior, which in turn could increase volatility in the market and weaken the HODL mindset that is central to many crypto investors.

The way forward: coalition negotiations and political compromises

Whether the SPD can actually implement its tax plans depends on the ongoing coalition negotiations. The first rounds have already been completed, and now the decisive “round of 19” is coming up, in which the leading figures of the parties involved will negotiate political compromises. Given the CDU's position, the likelihood that the SPD will be able to enforce its demands in exchange for concessions in other areas could increase.

The coming weeks will be crucial in clarifying whether and how the tax situation for cryptocurrencies in Germany will change. The discussion about the future of crypto taxation therefore remains exciting and could have far-reaching effects on Germany as a crypto location.