On 6 July 2026 Germany's federal cabinet included in its draft budget for 2027 an intention to tax cryptocurrencies under § 20 rather than § 23 of the German Income Tax Act in future — the same rules that apply to stocks and other capital assets, with a flat withholding tax and no holding period. Today, crypto gains are tax-free after one year. Under § 20 they wouldn't be, no matter how long you hold. The government expects roughly one billion euros in additional annual revenue.
In the days after, the first questions reached me. I could have added a notice to the tax view, shown a countdown, or at least sent out an announcement. I decided to change nothing about Folanza for now instead. That restraint wasn't easy for me. And it's still the right call:
1. A cabinet decision is not a law
What was decided on 6 July is an intention in a draft budget, not a passed law. There is still no formal draft bill, no fixed date, and no answer to the most important question: whether and how coins you already hold would be grandfathered in. Bundestag and Bundesrat, Germany's two parliamentary chambers, still have to approve the reform, and at the earliest it would apply to purchases from 1 January 2027. A petition to keep the current holding period is running in parallel — the outcome is open.
What's settled instead is what applies today: the one-year holding period under § 23 of the German Income Tax Act is unchanged and in force, confirmed by a letter from Germany's Federal Ministry of Finance dated 6 March 2025 and a ruling by Germany's Federal Fiscal Court (case IX R 3/22). Folanza's tax logic calculates exactly according to that. I'm not a tax advisor, but that much I can tell you with certainty.
2. A wrong assumption in a tax tool is real harm
Had I already rebuilt the tax engine for a possible future, I would have had to guess at the cutoff date, the grandfathering rules, and transition provisions that nobody knows yet. In most parts of the app, a wrong assumption would be annoying. In a tool you use for your tax return, it wouldn't be just that. So Folanza keeps calculating according to the law that actually applies, not the one that might come.
What makes the reform more useful once it arrives
If the reform does take effect, the grandfathering rules will likely require proof of when and at what price you originally bought your coins. Folanza already keeps exactly that unbroken FIFO history today, locally on your device, exportable at any time. What's one feature among many now would become your evidence then. Not because I planned it that way, but because complete, honest records are almost always useful in the end.
What happens next
For now, nothing changes for you as long as nothing is decided. Once an actual draft bill with a cutoff date and transition rules exists, I'll adjust Folanza accordingly and write about it here — not before.
Until then, you won't get guesses from me, only what actually applies today.