Denmark is moving towards implementing new tax regulations that could significantly affect cryptocurrency investors by 2026. The Danish Tax Law Council has recommended the taxation of unrealized gains and losses on crypto assets, meaning investors might be liable for taxes based on the current value of their holdings, even if they haven’t sold them.
In a comprehensive 93-page report, the Council presented three potential models for taxing cryptocurrencies: capital gains tax, warehouse taxation, and inventory taxation. The preferred model appears to be “inventory taxation,” which would classify an investor’s entire crypto portfolio as a single “inventory,” subjecting it to annual taxation regardless of actual sales.
Denmark to Become First Country to Tax Unrealized Crypto Gains at 42% by 2026
Danish Tax Minister Rasmus Stoklund highlighted that existing tax regulations often place an unfair burden on crypto investors. The new proposal aims to streamline the tax process; however, it is important to note that these are recommendations and not yet enacted laws.
Additionally, the proposal includes a mandate for crypto service providers, such as exchanges, to report user transactions, with this information accessible to all EU member states. Stoklund confirmed that the Danish Parliament is scheduled to discuss the bill in 2025, with the potential for implementation starting in January 2026.
This initiative follows similar trends seen globally, including support from U.S. Vice President Kamala Harris for a tax on unrealized assets, and Italy’s considerations for increasing taxes on Bitcoin holdings.
If approved, Denmark’s new tax framework could have far-reaching implications for crypto investors. The proposal has been met with backlash from the cryptocurrency community, who perceive it as a punitive measure against the industry.
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