Germany's Federal Ministry of Finance has drafted legislation that would place crypto assets acquired after December 31, 2026 into the capital-income tax regime from January 1, 2027, while preserving the existing Section 23 framework for earlier holdings. Gains on newly acquired assets would face a 25% flat withholding tax plus the solidarity surcharge, producing an effective rate of about 26.375%, with automatic withholding by service providers starting January 1, 2028. Pre-cutoff holdings would retain the one-year holding-period exemption. The proposal retains a €1,000 saver’s allowance, permits crypto losses to offset gains from shares and other securities, and provides a favorability check for taxpayers with personal rates below 25%. Finance Minister Lars Klingbeil has linked the measure to budget consolidation, with projected revenue of €160 million in 2028 and about €350 million annually by 2031. The draft still requires approval through Germany's legislative process.