The political discussion surrounding cryptocurrency taxation in Germany has intensified following a state election victory by the right-wing Alternative for Germany (AfD) party. The party has previously advocated for maintaining the current 12-month tax exemption that Bitcoin enjoys for private holders.
While the state-level outcome in Saxony-Anhalt does not directly alter federal law or add seats to the Bundestag, it provides the AfD with a broader platform for its agenda. Berlin is currently preparing new tax regulations within a market that generated an estimated $24.1 billion in on-chain taxable activity in 2025, according to data from Chainalysis.
Election Results and Political Fallout
In the recent election across 2,661 polling districts, the AfD secured 43.8% of party list votes and 44.3% of first votes. Meanwhile, Chancellor Friedrich Merz’s CDU party dropped to 17.2% of party-list votes, marking a decline of nearly 20 percentage points compared to 2021. Voter turnout rose by 17.5 points to reach 77.8%.
Reuters reported that Merz ruled out any collaboration with the AfD, stating the outcome shook the CDU to its foundation. The AfD captured 39 of the total 83 seats, falling just three short of a majority. AfD co-head Tino Chrupalla urged CDU lawmakers to help form a center-right conservative majority, adding pressure to traditional barriers against cooperating with the party. Domestically, the Saxony-Anhalt branch of the AfD has been designated as right-wing extremist by the regional intelligence agency, and co-head Alice Weidel described the result as a breakthrough aimed at the 2029 federal elections.
The AfD's Stance on Bitcoin
The AfD's advocacy for digital assets dates back to before its recent electoral gains. In an October 23, 2025 Bundestag motion, the party characterized Bitcoin as decentralized, non-manipulable, and limited in availability, arguing it should be treated differently from other cryptocurrencies.
The party called for Bitcoin to be excluded from the Markets in Crypto-Assets (MiCA) regulation, advocated for the retention of the 12-month holding period, and requested that private mining and Lightning-node operations not be classified as commercial activities. This position was reiterated in May when the AfD opposed a Green Party bill aimed at removing the holding period, arguing that the government should reduce taxation and focus spending on core state functions.
Federal Tax Plans and Market Stakes
Under current German Finance Ministry guidance, gains on privately held crypto are taxable if the acquisition and disposal occur within one year, while sales after that period are generally non-taxable. However, the cabinet-approved 2027 budget plan indicates that new crypto tax regulations will be implemented, with reports suggesting Berlin aims to eliminate the one-year tax exemption to raise at least €1 billion annually.
A previous attempt by the Green Party to mandate personal income tax on private crypto disposals regardless of the holding period failed in committee in May. That proposal relied on a Frankfurt School study estimating billions in extra revenue.
The stakes of the debate extend beyond a single state due to Germany's position as a major crypto market. Chainalysis estimated that Germany received $219.4 billion between July 2024 and June 2025, representing a 54% increase. Additionally, TRM Labs ranked Germany tenth globally for Q1 2026 retail crypto volume at $25.3 billion. Although Saxony-Anhalt cannot dictate federal tax policy, the AfD's electoral success gives one of the leading opponents of the tax changes a stronger voice as the national debate progresses.
