Denmark Gets Tough on Crypto Trader Tax
The Danish Tax Agency, known locally as the Skattestyrelsen, or SKAT, has announced its intention to begin collecting the data of crypto traders from several exchanges.
The move follows stricter cryptocurrency regulations coming into force in the country and the agency receiving permission from the Danish Tax Council to access the data stores of cryptocurrency exchanges.
The type of data to be collected includes the identity of customers and all purchase and sales of cryptocurrency for the two years between the beginning of 2016 until the end of 2018. A customer identification will include their name, address, and CPR numbers, which is the Danish tax ID number.
The Skattestyrelsen has reportedly already begun contacting three cryptocurrency exchanges to discuss the acquisition of the required information. It is the first time such access has been granted to a government agency in Denmark. Karin Bergen, Director of Personal Income Tax at the Skattestyrelsen, said the move will improve Denmark’s control over the emerging cryptocurrency market:
“This gives us new opportunities with respect to exerting control in the field.”
In December last year, the agency launched an investigation into 2,700 Bitcoin traders who it believed were secretly trading on a Finnish crypto exchange. At the time, Bergen warned citizens that they would be hearing from the agency regarding unpaid taxes on any “winnings”.
At the time, lawyer and Bitcoin expert Payam Samarghandi confirmed that cryptocurrency is a taxable asset in the nation, similar to that of expensive art or antiquities.
The Bigger Picture
Bergen went on to note that the agency does not underestimate the size of the cryptocurrency market and appreciates that it may be faced with large amounts of data to review.
“..it’s still too early to tell how many traders are out there and how much money has been traded,” she said.
Denmark is still refining its cryptocurrency tax legislation and has previously instigated rules similar to those applied to stock market gains. However, with a recent survey from the National Tax Board revealing that almost 10 percent of the population have considered shopping with cryptocurrency, greater urgency has now been placed on defining proper regulation.