According to Fixygen, the German Ministry of Finance has drafted a proposal to reform the taxation of crypto assets, which would introduce a 25% tax rate on profits from the sale of Bitcoin, Ethereum, and other cryptocurrencies, regardless of the length of time the asset was held.
The corresponding draft bill is in the early stages of approval within the federal government, Handelsblatt reported on September 9, citing a document obtained by the publication. Germany currently remains one of the most attractive major European jurisdictions for long-term private investors in cryptocurrencies. Under current rules, profits from the sale of crypto assets held for more than one year are generally not subject to income tax. If an asset is sold within 12 months of purchase, the profit is classified as a private sale of property and taxed at the taxpayer’s individual rate. This procedure was confirmed by official clarifications from the German Ministry of Finance on March 6, 2025.
The new model is expected to fundamentally change this approach. It is proposed to reclassify crypto assets from the category of private property transactions to the category of capital gains and tax them similarly to profits from stock transactions. The base rate of the Abgeltungsteuer will be 25%. Taking into account the solidarity surcharge, the effective tax rate could reach 26.375%, excluding any potential church tax.
The proposed rules would apply only to cryptocurrency acquired after December 31, 2026. For Bitcoin, Ethereum, and other assets purchased earlier, the current tax regime is expected to remain in place.
The bill calls for the new rules to take effect on January 1, 2027. However, automatic tax withholding by German cryptocurrency service providers is planned to be introduced only on January 1, 2028, to give platforms time to restructure their accounting systems.
The Ministry of Finance estimates that the rule change will generate approximately EUR 160 million in additional tax revenue for the budget in 2028. In subsequent years, the amount is expected to increase and, according to the ministry’s calculations, reach approximately EUR 350 million in 2030.
The reform will effectively eliminate the main tax advantage of long-term cryptocurrency ownership in Germany. It will no longer be sufficient for an investor to hold Bitcoin or Ethereum for more than a year to fully exempt the profit from the sale from taxation.
However, a final decision has not yet been made. The Ministry of Finance’s draft is in the early stages of interagency coordination, after which the document must undergo further review by the government, the Bundestag, and the Bundesrat.
Separately, Germany is already increasing tax transparency for transactions involving digital assets. In November 2025, the Bundestag approved the implementation of the European DAC8 Directive, which requires crypto service providers to report information on certain customer transactions to tax authorities.
The record victory of the Alternative for Germany (AfD) in the state elections in Saxony-Anhalt does not give the party the ability to independently change Germany’s foreign policy or stop military support for Ukraine, but it is capable of increasing political pressure on the federal authorities, according to an analysis by the Experts Club information and analytical center.
In the September 6 election, AfD received 43.8% of the vote and 39 of the 83 seats in the Landtag. An absolute majority requires 42 deputies. The simplest arithmetic option for creating a majority is an alliance between AfD and the five deputies of the Sahra Wagenknecht Alliance (BSW), which would provide 44 votes. At the same time, there is currently no agreement on such a coalition. The CDU, SPD, Greens and The Left reject cooperation with AfD.
Even if AfD forms a state government, its powers will be focused primarily on education, culture, the police, regional administration, infrastructure and the state budget. Foreign policy and defense, in accordance with Germany’s Basic Law, fall within the competence of the federal government.
“The government of Saxony-Anhalt does not receive a separate vote in NATO and cannot independently cancel federal funding for aid to Ukraine,” emphasized Experts Club founder Maksym Urakin.
Saxony-Anhalt has four of the 69 votes in the Bundesrat. This allows the state government to influence part of federal legislation, especially on issues affecting the powers of the states, but it needs allies among other regions to block decisions.
Magdeburg will also not be able to introduce a political ban on the transit of military cargo for Ukraine. At the same time, state authorities participate in approving certain transport and administrative procedures, so a confrontational stance by the regional authorities could theoretically lead to delays and additional bureaucratic difficulties.
Important Bundeswehr facilities are located in Saxony-Anhalt, including the Army Combat Training Center in the Gardelegen—Letzlingen area, the Klietz training ground, where Ukrainian Leopard 1A5 crews underwent training, as well as logistics units in Burg. At the same time, these structures are subordinate to the federal defense authorities, not to the state government.
The consequences for Ukrainians living in the state itself may become more immediate. AfD advocates reducing social support for Ukrainians, changing approaches to integration programs and strengthening return policies. The state cannot abolish the temporary protection regime established at EU level, but it can influence additional regional programs and administrative practices.
The volume of passenger car imports to Ukraine, including cargo-passenger vans and race cars (UKT ZED code 8703), amounted to $2.62 billion in January–July 2026, which is 17% less than the figure for the same period in 2025 ($3.16 billion).
According to statistics released by the State Customs Service of Ukraine, in July alone, passenger car imports fell by 27.2% compared to July of last year—to $443.2 million, which is also 5.3% less than in June 2026.
The top three suppliers of passenger cars to Ukraine over the first seven months have consistently been the United States, Germany, and Japan, whereas in the previous year they were Germany, the United States, and China. Specifically, car shipments from the U.S. fell by 3.2% to $508.3 million, those from Germany decreased by 26% to $416.2 million, and imports from Japan totaled $371.2 million, whereas last year, cars worth $407.7 million were imported from China.
Imports of passenger cars from other countries during this period totaled $1.33 billion—20.4% less than last year’s figure.
At the same time, over the seven-month period, Ukraine exported only $2 million worth of such vehicles, primarily to Georgia, the Czech Republic, and Kazakhstan, whereas last year, total exports to the UAE, the Czech Republic, and Poland amounted to $4.54 million.
Passenger cars accounted for 4.52% of Ukraine’s total imports of goods in January–July, compared to 6.89% during the same period last year; their share of total exports was 0.01% and 0.02%, respectively.
As previously reported, in 2025, passenger cars worth nearly $6.15 billion were imported into Ukraine, which is 40.2% more than in 2024. The top three exporters were the United States, Germany, and China. Car exports totaled $10.1 million (2.7 times less).
The significant increase in passenger car imports to Ukraine starting in the summer of 2025 was driven by news that VAT exemptions on electric vehicle imports would be abolished as of January 1, 2026; as a result, imports have declined significantly since the beginning of this year. However, starting in March, a slow but steady recovery of the passenger car market—including electric vehicles—began.
In January–July 2026, Ukraine imported $507.5 million worth of tractors, which is 2% more than during the same period last year, when imports totaled $497.8 million, according to data from the State Customs Service.
However, in July alone, tractor imports fell by 5% compared to July 2025 and by 3% compared to June of this year, to $70.6 million.
Germany was the largest supplier of tractors to Ukraine over the seven-month period, accounting for 19.4% of imports, or $98.3 million.
China supplied nearly the same volume—$98 million, or 19.3% of total imports. The United States ranked third with shipments worth $89.6 million, accounting for nearly 17.7%.
Thus, the three largest countries accounted for about 56.4% of all tractor imports into Ukraine during January–July.
Compared to last year, the supplier structure has changed. In January–July 2025, the United States was the largest supplier with $94.1 million in shipments, followed by China with $87.3 million and Germany with $83.9 million.
Over the year, shipments from Germany increased by approximately 17%, and those from China by more than 12%, while imports from the United States decreased by about 5%.
For the full year of 2025, Ukraine imported tractors worth $845.7 million, which was 7.9% higher than in 2024. The main suppliers at that time were also the United States ($179.7 million), Germany ($145 million), and China ($142.8 million).
Thus, in 2026, the growth in tractor imports continued, but its pace slowed noticeably: over the first seven months, the figure increased by only 2%, and by July, a negative year-over-year trend had already been recorded.
According to Dw.com, German law enforcement authorities detained a 33-year-old Ukrainian citizen suspected of gathering information about a defense contractor in Bavaria to prepare for possible sabotage.
As reported on August 6 by the Munich Public Prosecutor’s Office and the Bavarian State Criminal Police Office, the man was detained on August 2 in the federal state of Thuringia with the assistance of local police. The following day, a Munich district court issued an arrest warrant, after which the suspect was placed in a pretrial detention center in Bavaria.
According to the investigation, in June 2026, the man allegedly photographed the premises of a defense contractor in southern Germany and transmitted the images to his client. German law enforcement officials suspect that this material could have been used to prepare acts of sabotage.
The suspect is considered a so-called “low-level agent.” German security agencies use this term to describe individuals whom foreign intelligence services may recruit to carry out specific, straightforward tasks, such as photographing facilities, conducting surveillance, or gathering publicly available information.
The prosecutor’s office has not disclosed which country’s intelligence service may have recruited the man. The name of the defense contractor is also being withheld due to the ongoing investigation.
In Germany, suspicion of espionage aimed at preparing acts of sabotage carries criminal liability. The investigation is currently ongoing, and the detainee’s guilt has not been established by a court.
German security agencies have previously warned of an increase in attempts by foreign intelligence services to recruit operatives via social media and messaging apps. Defense companies, military facilities, and transportation and energy infrastructure were cited as potential targets of such operations. At the same time, law enforcement officials have not yet officially linked the new arrest to a specific country or other investigations.
Net migration to Germany fell to 235,000 people in 2025, compared with 663,000 in 2023, according to a study by the German Economic Institute (IW) published on July 28, 2026. Excluding the pandemic period, this is the lowest figure since 2010. Experts at the Experts Club Information and Analytical Center attribute the decline to several factors: a decrease in the number of refugees, the departure of workers from Central and Eastern European countries, a decline in migration from the Western Balkans, and an increase in emigration by German citizens themselves.
The largest net inflow from a single country in 2025 came from Ukrainian citizens, amounting to 89,000 people. A year earlier, the figure was 116,000. Ukrainians have a special status because they are admitted to Germany mainly under the EU’s temporary protection mechanism rather than through the standard asylum procedure. Further developments will depend primarily on the course of the war and the conditions of Ukrainians’ stay in Germany.
By the end of 2025, approximately 1.41 million Ukrainian citizens were listed in Germany’s Central Register of Foreigners. They became the second-largest foreign group after Turkish citizens.
The number of initial asylum applications fell from 329,000 in 2023 to 113,000 in 2025.
The inflow from Syria declined particularly sharply: the number of initial applications fell from 103,000 to 23,000. Over the same period, the number of applicants from Afghanistan decreased from 51,000 to 24,000, while the number from Turkey fell from 61,000 to 12,000.
At the end of 2025, the largest groups of people registered in Germany as being in need of protection remained citizens of Ukraine, at approximately 1.164 million; Syria, at 669,000; and Afghanistan, at 321,000.
IW links the decline in Syrian migration primarily to the change in the situation in Syria following the fall of Bashar al-Assad’s regime in 2024, as well as to the tightening of German and EU migration policies.
Another important change was the reversal of migration from the new EU member states.
In 2023, Germany recorded a net inflow of approximately 42,000 citizens from these countries. In 2024, 35,000 more people left Germany than arrived, while in 2025 the net outflow reached 45,000 people.
This group includes, in particular, citizens of Poland, Romania, Bulgaria, Serbia, Hungary, Croatia, and other countries that joined the EU from 2004 onward. Economists explain migrants’ return by the narrowing gap in wages and living standards, growing demand for workers in their own countries, and the overall ageing of the population of Central and Eastern Europe.
At the end of 2025, approximately 904,000 Romanian citizens and 840,000 Polish citizens were registered in Germany. Over the year, the number of Polish citizens declined by approximately 25,000, while the total number of EU citizens fell by 75,000.
In recent years, citizens of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia have been actively recruited into the German labour market, including under special rules for the Western Balkans. However, their net migration has been steadily declining since 2022. In 2025, it amounted to approximately 39,000 people. IW warns that the potential for further recruitment of workers from the Balkans is also limited: the populations of most countries in the region are shrinking, while their own labour markets are facing staff shortages.
Against the backdrop of the overall decline, there are also opposing trends. Net migration of Vietnamese citizens increased from 10,000 people in 2023 to 19,000 in 2025.
At the same time, the number of residence permits issued to citizens of non-European countries for employment purposes increased by 33,000, or 13.6%, between 2023 and 2025. The number of permits related to education also rose by 33,000, or 15.3%. Thus, the inflow of students and skilled workers is currently declining significantly more slowly than humanitarian and intra-European migration.
The net outflow of German citizens increased from 74,000 people in 2023 to 97,000 in 2025. IW notes that negative migration among German citizens occurs regularly. However, growth of approximately 30% over two years may be an alarming signal, especially if qualified specialists are leaving the country.
At the same time, part of the statistics may relate to previously naturalised migrants who return to their countries of origin after obtaining German citizenship. It is difficult to assess the structure of this outflow precisely because the final destination country is not recorded for many of those leaving.
According to the Central Register of Foreigners, approximately 14.07 million foreign nationals were living in Germany at the end of 2025.
The largest groups were:
Approximately 5 million foreigners, or 35%, were citizens of EU member states. Another 4.6 million held the citizenship of other European countries, while approximately 4.5 million represented countries in Asia, Africa, the Americas, and other regions.
If not only foreign citizens but also migrants who obtained German citizenship and their direct descendants are taken into account, Germany had approximately 21.8 million people with an immigration history in 2025, representing 26.3% of the population. The largest groups by country of birth were people from Poland and Turkey, at approximately 1.5 million each; Ukraine, at 1.3 million; and Russia and Syria, at approximately 1 million each.
The decline in migration is occurring simultaneously with the mass retirement of the baby-boomer generation. According to a separate IW forecast, by 2036 the gap between older workers leaving the labour market and young people reaching working age could reach 4.3 million people. Economists consider a return to a mass inflow of workers from Eastern Europe unlikely. Germany will have to recruit specialists and workers with medium and lower levels of formal qualifications more actively from Asia, Africa, Latin America, and other regions.
IW proposes accelerating visa procedures, reducing the tax and social burden on workers, and extending simplified labour migration mechanisms similar to the existing rules for the Western Balkans to new countries. Thus, this is not about the complete cessation of migration but about a change in its structure. Germany is receiving fewer refugees and workers from neighbouring European countries, while the economy’s need for foreign labour continues to grow because of the ageing population.
