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Something Is Rotten In The State Of Denmark As It Investigates Taxes Owed On Bitcoin Gains

By

Nicholas

Ruggieri

WriterETHNews.com

The Danish tax agency says it has identified 2,700 individuals who owe, but whether the bitcoin gains are taxable is unclear.

Much like madness in great ones must not unwatched go, Skattestyrelsen (SKAT), Denmark's tax agency, has decided that taxes not paid on bitcoin gains will no longer go unwatched. In a recent press release, SKAT announced it would investigate 2,700 individuals who traded in bitcoins on an unnamed Finnish crypto exchange from 2015 to 2017 and failed to include any profits or losses on tax documents.

According to the information shared by the Danish agency, the 2,700 Danes purchased 49.7 million Danish krone (DKK) (about $7.56 million) worth of bitcoin on the exchange and sold back 53 million DKK (about $8.05 million) worth of bitcoin. The release also notes that most of the traders invested less than 10,000 DKK (about $1,500), while a smaller group traded between 10,000 DKK and 1 million DKK (about $152,000).

SKAT has already begun to contact the first group of Danish traders involved in the exchange and will individually assess whether the outcome of the deal should be included as taxable income. Karin Bergen, the directorate of SKAT, stated:

"This is probably just the tip of the iceberg. Although it is a relatively small bitcoin stock exchange, the information is a very valuable source, which clearly shows trends and patterns in the area. The knowledge we gain about data mining, segments, and methods in general will make us wiser in the area."

To Tax or Not to Tax, That Is the Question

SKAT's release emphasizes that if a loss or profit relates to trading bitcoins or other cryptocurrencies, then "the profit on resale must be included as personal income. … [and] losses could be deducted as an equalization deduction." However, SKAT's wills and fates do so contrary run. In an article from the Danish Broadcasting Corporation (DR), Danish lawyer Payam Samarghandi explains that the country's supreme tax authority, Skatterådet, found that bitcoins were not "real" currency in 2014, and therefore the profits are not taxable.

On the other hand, Louise Schack Elholm V, a member of the Danish parliament and the Liberal Party's tax rapporteur, disagreed with Samarghandi's reading of the Skatterådet ruling. Elholm argues that it is apparent from the 2014 decision that the profits from cryptocurrencies are taxable if they were speculative purchases, as in purchases made in an attempt to profit from short-term fluctuations in the market.

How SKAT plans to handle the taxation situation isn't made clear. The release only states: "If something does not match, we will contact them and ask for more information."

Maybe some sort of elaborate play to guilt the information out of the individuals? Just spitballing ideas here.

Translations by Google.

Nicholas Ruggieri

Nicholas Ruggieri studied English with an emphasis in creative writing at the University of Nevada, Reno. When he’s not quoting Vines at anyone who’s willing to listen, you’ll find him listening to too many podcasts, reading too many books, and crocheting too many sweaters for his dogs, RT and Peterman.

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