Germany’s Bitcoin tax fight heats up after AfD election victory

Germany’s debate over Bitcoin taxation has taken on a new political dimension after the Alternative for Germany (AfD) secured a strong showing in the Saxony‑Anhalt state election. While the state result does not directly alter federal tax law, it gives the AfD a larger platform as the federal government prepares a crypto‑tax reform slated for 2027.

Election outcome and political context

The AfD won roughly 44% of the vote in Saxony‑Anhalt, capturing 39 of the 83 seats in the state parliament. The party fell three seats short of an outright majority but outperformed Chancellor Friedrich Merz’s Christian Democratic Union (CDU), which received about 17% of the party‑list vote. Voter turnout was 77.8%.

AfD’s stance on Bitcoin taxation

The AfD has consistently opposed any removal of Germany’s one‑year holding‑period exemption for privately held Bitcoin and other crypto assets. In an October 2025 Bundestag motion, the party described Bitcoin as a “decentralized, non‑manipulable, and limited‑availability digital asset” and called for it to be excluded from the EU’s Markets in Crypto‑Assets (MiCA) framework. The motion also sought to keep private Bitcoin mining and Lightning node operations out of the commercial‑activity classification.

Federal government’s planned reforms

Germany’s finance ministry plans to introduce new crypto‑tax legislation as part of the 2027 budget. The proposal aims to tax cryptocurrency income similarly to other income, but the exact mechanism has not been disclosed. Earlier attempts by the Greens to eliminate the holding‑period exemption were rejected by the Bundestag Finance Committee in May.

Scale of crypto activity in Germany

Chainalysis estimates that Germany generated about $24.1 billion in potentially taxable on‑chain crypto activity in 2025, making it the second‑largest national market after the United States. The activity includes $15.6 billion in payments, $6.1 billion in realized gains and $2.4 billion in income. Between July 2024 and June 2025, $219.4 billion flowed into the country, a 54% increase from the prior year.

Implications of the state win

While the Saxony‑Anhalt result does not directly change federal tax policy, it strengthens the AfD’s position as a vocal opponent of the upcoming reforms. The party’s co‑leader Tino Chrupalla has called for a “center‑right conservative majority” that could involve cooperation with the CDU, a prospect the CDU has ruled out.

Outlook

The federal government remains responsible for any amendment to the one‑year holding rule. The finance ministry expects to present a concrete bill later in the 2027 legislative cycle, while the AfD will continue to push its preferred treatment through parliamentary proposals.