Bitcoin Profits Deemed Taxable by Denmark’s Supreme Court
Profits from the sale of cryptocurrencies like bitcoin are taxable, according to two rulings by the Supreme Court of Denmark. The verdicts in the cases, which involve crypto purchases and payments as well as income received from bitcoin mining, uphold decisions of lower courts. Denmark’s High Court Considers Crypto Gains Taxable Under Current Law
Profits made from the sale of bitcoin are taxable in Denmark, the country’s Supreme Court has decided in two separate rulings announced on Thursday. Both decisions are in lawsuits filed against the Danish Ministry of Taxation and confirm verdicts issued by lower-instance courts.
In one of the cases, the plaintiff acquired a certain amount of digital coins in 2011 – 2015, through purchases and donations from third parties for the development of crypto-related software. The private individual sold them in 2017 and 2018 at higher prices.
According to the court in Copenhagen, the bitcoins were obtained for the purpose of speculation and therefore their sale cannot be relieved from taxation under the State Tax Act. Then, the crypto received as payment constituted turnover for the man’s non-business enterprise, also triggering tax liability.
The same applies to the other case, in which coins were paid as reward for providing computing power for the mining of digital currencies between 2011 and 2013. The miner sold some of earned crypto at a profit in 2018. A statement quoted by Bloomberg, elaborates: The Supreme Court assumes that bitcoin is generally only acquired with a view to being sold and, to a limited extent, to be used as a means of payment.
The rulings that profits made from the sale of the cryptocurrency are taxable are likely to set a precedence for the tax treatment of crypto investments in the Scandinavian country.
National authorities in the European Union have been taking steps to clarify the taxation of crypto holdings and related profits. In December, 2022, the Italian government introduced a 26% levy on capital gains from crypto trading. A few months earlier, Portugal unveiled plans to tax them at 28%. However, EU-wide regulations for crypto assets are yet to be enforced. Tags in this story cases, Crypto, crypto gains, crypto mining, crypto payments, crypto profits, Cryptocurrencies, Cryptocurrency, danish, Denmark, Gains, high court, profits, rulings, Supreme Court, Tax, Taxation, Taxes
What do you think about the rulings of Denmark’s Supreme Court? Let us know in the comments section below. Lubomir Tassev
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration. Tax Benefits for Bitcoin Businesses in Belarus Extended Until 2025 TAXES | 13 hours ago Argentine Tax Authority AFIP Detects Irregularities in 184 Digital Wallet Tax Statements TAXES | Mar 21, 2023
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