Denmark: Bitcoin Sales Profits Are Taxable

In a major ruling today, the Danish Supreme Court said profits from the sale of bitcoin are taxable in two cases before the court on March 30, 2023.

Cases BS-32180/2021-HJR and BS-17439/2022-HJR involve two individuals, A and B, who purchased Bitcoin through various means and then sold it at a profit. A obtained bitcoin through purchase and gift from 2011 to 2015, while B obtained bitcoin through mining from 2011 to 2013. Both sold bitcoin for a profit in 2018.

The issue in court is whether profits from the sale of bitcoin are taxable. The court held that A’s purchase of bitcoins was speculative in nature and therefore the sale of bitcoins was not tax-exempt under Section 5(1)a of the state tax code.

The court further held that A’s sale of donated bitcoins and B’s sale of mining bitcoins constituted income from his non-commercial activities. Therefore, the sale of bitcoins is taxable under Section 4a of the State Tax Code.

The Supreme Court ruling is significant as it sheds light on the taxation of Bitcoin profits in Denmark. Until now, there has been ambiguity over whether bitcoin is taxable in Denmark. The ruling states that profits from the sale of bitcoin are taxable like other sources of income.

The decision could have implications for holders of bitcoin and other cryptocurrencies in Denmark. Individuals must carefully consider the tax implications of buying and selling cryptocurrencies and seek professional advice if needed.

Overall, the Danish Supreme Court’s ruling represents an important step forward in clarifying the legal status of bitcoin and other cryptocurrencies in Denmark. It provides individuals and businesses with much-needed guidance on the tax treatment of profits from bitcoin sales.

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according to Kyptos

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