Germany Rejects Die Linke Crypto Tax and Mining Proposal

Germany’s Bundestag rejected a Die Linke motion Thursday that combined tougher crypto taxation with mining-related environmental restrictions, reporting requirements and new EU regulatory powers.

The proposal sought an EU-wide framework allowing regulators to prohibit trading in crypto assets that lack a macroeconomic function, cause severe environmental harm through proof-of-work processes or create significant systemic risks. It did not call for an immediate unilateral German ban.

The motion also proposed classifying crypto assets under Section 20 of Germany’s Income Tax Act and applying departure taxation under Section 6 of the Foreign Tax Act. It called for full implementation of the Crypto-Asset Reporting Framework, automated data transfers between trading platforms and tax authorities, and broader blockchain-analysis capabilities for tax enforcement.

Self-hosted wallets would have required identity verification when interacting with regulated providers. The proposal also sought a central European Union crypto supervisor under the European Securities and Markets Authority.

The Bundestag’s Finance Committee recommended rejecting the motion on Oct. 7. The full chamber rejected it Oct. 8, with CDU/CSU, AfD and SPD supporting the rejection. The Greens voted for the motion.

The proposal raised concerns about lost tax revenue and cited private-sector estimates because Germany lacked centralized official statistics on crypto-tax revenue. Estimates put the number of people in Germany who actively used crypto assets at more than 7 million in 2024, with nearly €47.3 billion in realized gains and about €4 billion in related taxes. Fewer than 3% of German crypto users were estimated to have reported their gains correctly.

The environmental case focused on electricity demand from proof-of-work networks. A Bitcoin-specific estimate places annualized electricity consumption at 204.44 terawatt-hours, comparable to Thailand’s electricity consumption. The figure does not measure electricity use across all proof-of-work assets.

The rejection did not change Germany’s tax rules or create new wallet-identification requirements.