Crypto Tax Rules Are Changing Across Germany, Italy, Cyprus, Spain, the Netherlands and Illinois

Italy’s 33% crypto-gains rate and Cyprus’s 8% disposal tax are already in force in 2026. Germany and the Netherlands are considering new regimes, while Illinois has enacted a digital-asset tax due to start in 2027. Spain has separately clarified when self-custodied crypto falls outside a foreign-asset reporting requirement.

Germany Drafts 25% Crypto Tax From 2027

Draft, not law: Germany’s Federal Ministry of Finance is proposing a 25% tax on qualifying crypto investment income, plus the solidarity surcharge, from 2027 for assets acquired after Dec. 31, 2026. The draft would end the current one-year tax-free holding period for those assets.

The draft would move qualifying “exchange crypto assets,” including Bitcoin and Ether, from the private-disposal rules in Section 23 to the investment-income rules in Section 20. Existing holdings would generally remain under the current rules. Domestic service providers would also be required to withhold tax from 2028, while the draft addresses certain lending and passive-staking income.

Italy Raises Crypto Tax Rate to 33%

In force from Jan. 1, 2026: Italy raised its substitute tax on crypto-asset gains from 26% to 33% under Legge 207/2024, the 2025 Budget Law. The same law removed the previous €2,000 gains threshold from Jan. 1, 2025.

A separate provision in the 2026 Budget Law, Legge 199/2025, keeps the rate at 26% for qualifying euro-denominated electronic-money tokens under the EU’s MiCA framework. The 26% rate also applies to other proceeds from those tokens.

Cyprus Introduces 8% Crypto Disposal Tax

In force from Jan. 1, 2026: Cyprus introduced an 8% flat tax on profits from crypto-asset disposals through Article 20E of its Income Tax Law.

The regime applies to disposal gains rather than the value of crypto held. Sales, crypto-to-crypto swaps, payments and gifts can constitute disposals. Losses can be offset only against crypto-disposal profits in the same tax year, with no carry-forward and no offset against other income.

Spain Clarifies Self-Custody Reporting

Binding consultation issued June 24, 2026: Spain’s Directorate-General for Taxation addressed crypto reporting in consultation V5066-26. Self-custodied crypto falls outside Modelo 721 when the private keys are not held by a third-party custodian. The test is control of the keys, rather than whether a wallet is described as “hot” or “cold.”

The €50,000 threshold continues to apply to qualifying crypto held through foreign third-party custody. The exclusion from Modelo 721 does not remove any tax due on gains.

Netherlands Proposes 2028 and 2030 Changes

Proposal, not law: A Sept. 29 cabinet letter proposes moving financial instruments, including shares, bonds and options, into a realized-gains regime under Box 3 from 2028. Remaining categories, including crypto-assets and savings, would move to a realized-gains system in 2030.

The government would need a supplementary bill because the existing Box 3 legislation is already before the Senate. Deloitte said the timetable remains uncertain.

Illinois Enacts 0.2% Digital-Asset Tax

Enacted, effective Jan. 1, 2027: Illinois has enacted a 0.2% tax on qualifying digital-asset business activity. The levy applies to qualifying broker activity rather than an individual’s crypto investment gain.

The Illinois Department of Revenue released draft proposed rules Sept. 28, with comments due by Oct. 30. The rules had not yet been filed with the Secretary of State or submitted to the Joint Committee on Administrative Rules at the time of publication.

DAC8 and CARF Expand Crypto Reporting

EU DAC8 rules began applying Jan. 1, 2026, requiring reporting crypto-asset service providers to collect data on reportable transactions. Exchanges covering the 2026 reporting year are due by Sept. 30, 2027.

As of Sept. 14, 2026, 77 jurisdictions had committed to CARF exchanges beginning in 2027, 2028 or 2029. Argentina has committed to begin exchanges by September 2029.