Denmark Develops Recommendations for Tax Regulation of Cryptocurrencies
Date: 2024-10-24 Author: Henry Casey Categories: IN WORLD
The inventory tax model assumes that all of an investor’s crypto assets are treated as a single “inventory” that is subject to taxation annually on a set date, regardless of whether the assets have been sold at that time. This innovation will affect all crypto assets on an equal basis with traditional financial instruments such as stocks and bonds, which will lead to taxation of both unrealized gains and losses.
The Danish Tax Council has also proposed requiring virtual asset service providers (VASPs), such as crypto exchanges and crypto payment companies, to report data on their clients’ transactions to regulators. This information should be available to all countries of the European Union, which will strengthen the supervision of financial transactions in the region.
Danish Tax Minister Rasmus Stocklund expressed the opinion that the capital gains tax for crypto investors is unfair and proposed introducing a more simplified and understandable tax system. He also noted that the relevant bill will most likely be introduced to the country's parliament no earlier than 2025, and its entry into force is expected on January 1, 2026.
It is worth noting that the Danish authorities have already tried to include cryptocurrencies in the country's Tax Code back in 2021, in order to strengthen the fight against tax evasion and reduce cases of fraud using crypto assets.
