Denmark is considering a new tax regime for cryptocurrencies, including a tax on unrealized gains and losses, leading to some false reports that this decision has already been taken.
Cryptocurrency news outlet AltcoinBuzz falsely reported that Denmark “made history by becoming the first country in the world to tax unrealized capital gains on cryptocurrencies.” Meanwhile, Coingape wrote that Denmark will “impose a 42% tax on unrealized capital gains on all crypto assets.”
In fact, the Danish Tax Law Council has proposed three different taxation models in a document it has been working on since 2021. None of these tax proposals have been formally adopted.
Even if an agreement had been reached at the time of writing, these rules would probably not come into effect until 2026.
Here’s what actually happened
Tax Minister Rasmus Stocklund announced on Wednesday that the Tax Law Council has submitted updated recommendations to “ensure a more rational taxation of the profits and losses of crypto investors.”
The 93-page report recommends that all crypto assets be taxed the same to remove the heavy taxes that some crypto holders have to pay.
Although the report proposes three separate taxation models, the Tax Law Council appears to be recommending the inventory taxation model. Here, all assets, including stocks and bonds, are valued together. The total change in value is taxed.
Read more: Michael Saylor says he pays taxes on Bitcoin, unlike ‘crypto anarchists’
“The Tax Law Council’s recommendations suggest that the asymmetry in the taxation of profits and losses will be eliminated,” Scatministreet said in a press release. “This means investors can deduct losses from gains on other crypto assets.
“Furthermore, this recommendation makes it possible to offset gains on crypto assets with losses on financial contracts, and vice versa. The so-called inventory tax will arise as capital income, and in return, ” (translated from Danish)
Denmark’s parliament is expected to introduce the bill sometime in early 2025 and will need to carefully assess the report before making a decision.
Cryptocurrency tax report to be released shortly after scheduled appointment In Italy, the capital gains tax on cryptocurrencies will jump from 26% to 42%, with a 50% increase.
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