Copenhagen, Tuesday, October 29, 2024 – Denmark is poised to introduce a groundbreaking tax on unrealized cryptocurrency gains, set to take effect on January 1, 2026.
The Danish Ministry of Taxation unveiled the proposal recently, which would impose a 42% tax on unrealized gains from digital assets like Bitcoin, aligning them with traditional financial assets.
The reform is designed to address perceived inequalities in Denmark’s current tax system.
According to Tax Minister Rasmus Stoklund, the existing rules have led to unfair taxation of crypto investors.
The new regulations aim to simplify crypto taxation and ensure consistency with other asset classes.
The proposal follows recommendations from the Danish Tax Council, which advocate for a tax on both unrealized gains and losses from cryptocurrencies.
Investors will also be allowed to offset losses from one crypto asset against gains from another.
Additionally, crypto gains may be offset against financial contract losses and vice versa. This system, known as inventory taxation, would classify cryptocurrency transactions as capital income, subject to continuous taxation even if the assets remain unsold.
Further legislative measures are expected in early 2025. The Danish government plans to introduce a bill requiring crypto-asset service providers to report client transactions to tax authorities and share this data with other EU countries.
The move mirrors a broader European trend, as countries like Italy have recently raised their capital gains taxes on cryptocurrencies.
