[Digital Today reporter Jae-won Choi] The far-right Alternative for Germany (AfD) party won a landslide in the Saxony-Anhalt state election, and political debate is expected to intensify over Bitcoin's one-year holding tax exemption. While the state election result does not directly change federal tax law, it is seen as increasing AfD's political influence as it has opposed tougher taxation.

On Sept. 8 (local time), Cryptopolitan reported that AfD took first place in the Saxony-Anhalt state election held on Sept. 6, winning 43.8 percent in the party-list vote. That was up 23 percent from 2021. The Christian Democratic Union (CDU) was limited to 17.2 percent. Based on preliminary figures, AfD secured 39 of 83 seats, leaving it 3 seats short of an outright majority of 42. Turnout was 77.8 percent.

AfD has shown a Bitcoin-friendly stance on crypto taxation. In a motion submitted to the lower house of parliament in October last year, it said Bitcoin should be distinguished from other crypto assets. It called for maintaining the 12-month holding tax exemption and said personal mining and operating Lightning nodes should not be treated as profit-making activities. It also argued for excluding Bitcoin from the European Union's Markets in Crypto-Assets (MiCA) regulation.

Under current German tax law, gains are taxable if an individual sells crypto assets, including personally held Bitcoin, within 1 year of acquisition. If held for more than 1 year, they are in principle tax-exempt. The government plans to overhaul the crypto-asset taxation system from 2027 and is also considering scrapping the 1-year holding exemption. Specific legislation has not yet been finalised.

Germany's Alliance 90/The Greens also introduced a bill in May to impose income tax on trading gains from crypto assets regardless of the holding period, but it was rejected in a parliamentary committee. At the time, AfD opposed expanding taxation. While Saxony-Anhalt has no authority to decide the federal tax system, the landslide has increased the likelihood that AfD will raise its voice further in future debate over Bitcoin taxation.