AfD’s record 43.8% win in Saxony-Anhalt reignites fight over Germany’s Bitcoin tax exemption

Germany’s Bitcoin tax fight has entered a more politically charged phase after the Alternative for Germany (AfD) secured almost 44% of the vote in Saxony-Anhalt’s state election, strengthening a party that has consistently opposed efforts to remove Germany’s one-year tax exemption for privately held crypto assets.

The result comes as Chancellor Friedrich Merz’s federal government prepares legislation that could change the way cryptocurrency gains are taxed from 2027. The AfD won 43.8% of the party-list vote and 44.3% of the first votes, taking 39 of the state parliament’s 83 seats.

The result left the party three seats short of an outright majority but placed it well ahead of the Christian Democratic Union (CDU), which received 17.2% of the party-list vote. Turnout reached 77.8%, a significant increase from the previous election.

AfD victory adds pressure to Germany’s Bitcoin tax fight

The party had already challenged proposed changes before its breakthrough in Saxony-Anhalt, arguing that privately held Bitcoin should retain its existing long-term tax treatment.

In an October 2025 Bundestag motion, the AfD characterized Bitcoin as a scarce digital asset and called for the 12-month holding period for privately owned Bitcoin to remain in place.

It also proposed distinguishing Bitcoin from other cryptocurrencies and argued that private mining and Lightning node activities should not automatically be treated as commercial operations.

The election result gives the party a larger political platform, although it does not provide any direct authority over Germany’s federal cryptocurrency tax rules.

The competing positions highlight the wider political tension surrounding Germany’s Bitcoin tax fight. While the AfD wants the existing long-term exemption preserved, the federal government is preparing its own proposal.

Germany’s Bitcoin tax fight centers on the one-year rule

Under Germany’s current framework, privately held cryptocurrencies are generally treated as assets for income-tax purposes. Gains from assets sold within one year of acquisition can be taxable, while private disposals after the one-year holding period are generally outside that specific tax regime.

Finance Minister Lars Klingbeil said earlier in 2026 that the government intended to change the way cryptocurrency income is taxed as part of its 2027 budget plans. The federal government’s budget planning subsequently confirmed that legislation covering crypto taxation would be introduced.

Klingbeil said in July that his ministry was developing the proposal and wanted cryptocurrency income to be taxed in a manner comparable with other forms of income. However, the government had not yet disclosed the final mechanism when the report was published.

The Greens had already attempted to change the existing system earlier in the year. Their proposal sought to make gains from private crypto sales subject to personal income tax regardless of how long an asset had been held.

The initiative was rejected by the Bundestag Finance Committee in May, leaving the existing holding-period treatment intact.

Billions in crypto activity raise the stakes

Germany’s Bitcoin tax fight is unfolding against the backdrop of substantial cryptocurrency activity.

Chainalysis estimated that Germany generated approximately $24.1 billion in potentially taxable on-chain crypto activity during 2025. That figure included an estimated $15.6 billion in payments, $6.1 billion in realized gains and $2.4 billion in income.

Chainalysis stressed that the figures represented activity that could potentially fall under tax rules rather than a calculation of taxes actually owed or unpaid.

Germany also recorded approximately $219.4 billion in cryptocurrency value received between July 2024 and June 2025, according to Chainalysis, representing a 54% increase compared with the previous comparable period.

Those figures explain why Germany’s Bitcoin tax fight matters beyond a narrow political dispute. Changes to the tax framework could affect individual investors, crypto businesses and the broader attractiveness of Germany as a European digital-asset market.

The country has also developed a growing regulated crypto sector. The report said Germany had 79 authorized crypto-asset service providers operating under the European Union’s Markets in Crypto-Assets framework by August.

Federal lawmakers hold the key to Germany’s Bitcoin tax fight

Despite the AfD’s electoral breakthrough, Germany’s Bitcoin tax fight will ultimately be decided at the federal level.

The Saxony-Anhalt government cannot independently rewrite Germany’s national cryptocurrency tax rules.

Any change to the one-year holding period or the broader treatment of crypto gains must pass through the federal legislative process after the Finance Ministry presents its proposal.

The AfD’s position could add political resistance to efforts to eliminate the long-term exemption, but its state election victory does not itself prevent the federal government from pursuing tax reform.

The party’s October 2025 Bundestag proposal already provides a clear indication of its preferred direction: preserve the 12-month Bitcoin holding period, distinguish Bitcoin from other crypto assets and avoid automatically treating private mining and Lightning activity as commercial operations.