Germany Passes Dedicated Crypto Reporting Law

Germany has become one of the first EU countries to pass a dedicated national law implementing DAC8. The Kryptowerte-Steuertransparenz-Gesetz (KStTG), or Crypto-Asset Tax Transparency Act, was approved by the Bundestag in November 2025 and takes effect in January 2026.

What the Law Requires

The KStTG requires crypto service providers operating in Germany to:

• Collect identity and tax residency information from all users
• Record transactions including purchases, sales, swaps, and transfers
• Submit annual reports to the Bundeszentralamt für Steuern (Federal Central Tax Office)
• Respond to verification requests from tax authorities

Key Deadlines

For crypto service providers in Germany:

• January 2026: Data collection begins
• July 31, 2027: First reports must be submitted (covering 2026 data)

This timeline is slightly earlier than the general DAC8 deadline of September 30, 2027, giving German authorities more time to process the data.

Penalties for Non-Compliance

The law includes penalties for late, incomplete, or incorrect reporting. While specific fine amounts depend on the nature and severity of the violation, service providers should take compliance seriously.

What's Notable About Germany's Approach

Germany's decision to create a standalone law (rather than simply amending existing tax regulations) signals the importance the government places on crypto tax transparency. It also provides clearer guidance for service providers compared to jurisdictions that have implemented DAC8 through more general amendments.

Good News for Long-Term Holders

Germany's favorable tax treatment for long-term crypto holders remains unchanged. Individuals who hold crypto for more than one year before selling can still realize gains tax-free. The KStTG is about reporting, not changing the underlying tax rules.