Germany Proposes Taxing 50% of Undocumented Crypto Sale Proceeds
A Circle policy executive says the plan would hit ordinary retail holders hardest. A German tax lawyer says the 50% figure is not final.
Germany's Federal Ministry of Finance has proposed a crypto tax reform that would apply a 50% substitute assessment basis to sales of digital assets when holders cannot show credible proof of purchase.
Under the plan, tax would be calculated on 50% of the sales proceeds rather than on actual gains. The measure is a proposal, not law.
Patrick Hansen, senior director for EU strategy and policy at Circle, criticized the draft on social media. Circle is the largest stablecoin issuer regulated under the EU's Markets in Crypto Assets (MiCA) framework.
"This will hit normal consumers/investors particularly hard," Hansen wrote. He said the people affected include those who cannot technically document their acquisition costs and who in recent years sometimes bought with little profit or at a loss.
Dr. David Hötzel, associated partner at the law firm Poellath, said the 50% figure is not final but creates significant liquidity risks. He said coins moved to German exchanges from self-custody wallets or overseas platforms would be caught, with deductions applying. He warned that the 50% base could lead to a large upfront deduction even where the real gain is small.
"The protection of existing holdings effectively depends on reliable documentation," Hötzel said.
Hansen said holders who cannot document their acquisition costs stand to be affected most.
