Denmark is planning to introduce a bill that will lay down new taxation of unrealized crypto holdings. According to the official report, the Tax Law Council of Denmark has suggested presenting a bill to tax unrealized gains and losses on cryptocurrency assets owned by Danish investors as early as 2026.
According to the report, the council believes that there have been multiple instances of Danish cryptocurrency investors being unjustly taxed using a standard “capital gains tax” method. Instead, the council recommended that new tax regulations look for a “simpler” method of taxing cryptocurrency assets.
The Council has suggested that all crypto assets be subject to the same set of regulations. It considered capital gains tax, warehouse taxes, and inventory taxation as three possible taxation schemes for cryptocurrency assets in the nation.
If introduced, these new laws will come at a time when Denmark is seeing steady growth in terms of crypto investment. However, the revenue generated from the sector might see a slight dip in the coming year.
Denmark Crypto Laws: What Do They Say?
In order to ascertain if a cryptocurrency transaction is governed by Danish authorities, the parties involved must decide whether their asset is categorized as a capital asset (investment), a means of payment (currency), or a financial service.
In Denmark, cryptocurrencies might be governed by “legislation on alternative investment funds, prospectuses, and money laundering,” depending on their specific features.
Depending on how a cryptocurrency is used, it may or may not be liable to individual taxes in Denmark. At present, The Danish Tax Authority (DTA) states that Bitcoin losses are not deductible as company losses for tax purposes. Additionally, as Bitcoin is the center of their entire operation, the DTA’s legislation implies that cryptocurrency enterprises are unable to deduct business losses.
Even if Bitcoin’s value drastically declines, losses incurred when using it as a payment method cannot be written off as a cost of doing business. These rules, however, appear to indicate that cryptocurrencies in Denmark offer fewer tax advantages than traditional modes of payment.
Denmark Likely To See A Steady Crypto Growth
Denmark’s new unrealized crypto gain laws come after the industry in the region has seen good growth. According to a research by Statista, by the end of, the Danish cryptocurrency sector is expected to generate $163.4 million in sales.
However, the revenue is anticipated to decrease at a 5.02% yearly rate (CAGR 2024-2025) by 2025, reaching a predicted total of $155.2 million.
On the brighter side, the average revenue per user in Denmark’s cryptocurrency sector in 2024 is $71.4. By 2025, the market for cryptocurrencies in Denmark is predicted to have 38.56% of its users, up from 38.53% in 2024.
The adoption of cryptocurrencies is booming in Denmark, a country renowned for its tech-savvy populace, and Danish investors are demonstrating a keen interest in digital assets.