Germany's proposed cryptocurrency tax reform has drawn criticism from industry leaders over provisions that could burden retail investors. Patrick Hansen, Senior Director of EU Strategy & Policy at Circle, the largest MiCA-regulated stablecoin issuer, has spoken out against a planned 50% substitute assessment basis that would apply to taxpayers unable to provide credible purchase documentation for their crypto assets.
Under the proposal from Germany's Federal Ministry of Finance, if taxpayers cannot provide purchase cost information, tax authorities would assume the assets were acquired after December 31, 2026, and calculate taxes based on 50% of the sales proceeds.
Hansen warned that this approach would disproportionately impact less experienced retail investors who may lack detailed records of their transactions. "This will hit normal consumers and investors particularly hard," Hansen stated. "People who don't even notice this regulatory change, who can't technically provide their acquisition costs in a clean way, and who in recent years have sometimes bought with little profit or even at a loss."
Hansen also questioned the assumption underlying the calculation, noting that Bitcoin has traded at lower prices than a year ago and other crypto assets have underperformed during the same period, making the implicit doubling assumption seem unrealistic.
Dr. David Hötzel, Associated Partner at Poellath, acknowledged that while the 50% figure is not final, the proposal creates significant liquidity risks, particularly for transfers from self-custody wallets or foreign platforms to German exchanges. Hötzel emphasized that "the protection of existing holdings effectively depends on reliable documentation," as the tax base could trigger substantial provisional deductions even in cases with minimal actual profits.
