Anyone following the current tax policy debate in Germany can easily lose track of the many developments underway. In addition to the draft bill for the Annual Tax Act 2026, numerous other reform initiatives are currently being discussed that could have significant tax implications for entrepreneurs, investors, high-net-worth individuals, and family-owned businesses.
Many details remain unresolved. Nevertheless, several trends are already emerging that are likely to shape Germany’s tax landscape in the years ahead.
Crypto taxation: Proposed end to the tax-free holding period
The discussion surrounding the taxation of crypto assets is currently developing particularly rapidly.
Under current law, profits from the sale of cryptocurrencies can generally be realized tax-free if more than one year has passed between acquisition and disposal. This is because trading in crypto assets is (for now) treated as private disposal transactions under Section 23 of the German Income Tax Act (EStG). It is precisely this principle that is now under review.
The government draft of the 2027 federal budget dated July 6, 2026, announces plans to classify crypto assets held as private assets as investment income in the future. As a result, capital gains from disposals would generally become taxable regardless of the holding period, similar to traditional stock trading. The applicable tax would be 25% plus a 5.5% solidarity surcharge.
If such legislation were ultimately enacted, it would represent one of the most significant changes to the taxation of crypto assets to date. However, it remains unclear how such a reform would be structured in practice and whether transitional rules or grandfathering provisions would be introduced.
Tax law becomes more digital: Greater transparency through AI and data analytics
At the same time, transparency in tax law continues to increase. International reporting obligations for digital assets are being expanded, while tax authorities are significantly enhancing their technological capabilities. In the future, tax procedures are expected to be conducted even more extensively through digital channels.
The draft bill for the Annual Tax Act 2026 also addresses this development. Among other measures, it provides for additional electronic procedures and an explicit legal basis for the use of AI systems by tax authorities.
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For taxpayers, this does not automatically mean stricter laws. However, tax authorities are likely to rely even more heavily on data-driven methods in the future and may be able to identify tax-related irregularities more efficiently.
26-point action plan against tax fraud
In addition, the Federal Ministry of Finance and the Federal Ministry of Justice presented a 26-point action plan against tax and financial crime on July 16, 2026. The proposed measures include, among other things, higher penalties for serious tax offenses, stricter rules regarding voluntary disclosures that exempt taxpayers from criminal prosecution, the establishment of a joint center for tax investigation authorities and financial investigation agencies, as well as various measures to improve the detection of cross-border tax crimes. However, many of these proposals still require specific legislative implementation. As a result, their full scope and practical impact cannot yet be determined conclusively.
Inheritance tax and business succession remain ongoing political and legal issues
The discussion surrounding inheritance tax is far from over.
The key issue remains whether the existing tax benefits for business assets meet constitutional requirements. At the same time, various reform models are already being discussed, ranging from targeted adjustments to significantly stricter taxation approaches.
For existing succession and wealth structures, there is generally no immediate need for action. However, anyone who is currently able to make tax-efficient gifts or transfers under the existing rules should consider taking action sooner rather than later.
Annual Tax Act 2026: Planned tax changes
In addition to these broader discussions, the draft bill for Germany’s 2026 Annual Tax Act contains numerous specific measures.
The proposed changes include, among other things:
- doubling the interest rate for tax back payments and tax refunds from the current 1.8% to 3.6% per year,
- new requirements for the tax treatment of purchase price allocations for developed real estate,
- adjustments to tax-exempt allowances and travel expenses,
- and a fundamental restructuring of the VAT treatment of tax groups.
Stay informed about tax developments in Germany with WINHELLER
Rarely have so many tax policy issues been on the agenda at the same time as they are today. The potential reform of crypto taxation, the ongoing debate surrounding inheritance tax, the use of AI in tax administration, and the planned amendments of the Annual Tax Act 2026 represent only some of the changes currently under discussion. Together, they clearly demonstrate that the tax environment is continuing to evolve across multiple areas at the same time.
Although many of these initiatives have not yet been finalized, it is already worthwhile to closely monitor these developments.
WINHELLER supports you in identifying important developments at an early stage and assessing their potential impact on your individual circumstances.
Last updated: July 21, 2026, 11:52 a.m.
