Tags in this story
cases, Crypto, crypto gains, crypto mining, crypto payments, crypto profits, Cryptocurrencies, Cryptocurrency, Danish, Denmark, Gains, supreme court, profit, rulings, Supreme Court, Tax, Tax, Taxes
Bitcoin Profits Considered Taxable by Denmark’s Supreme Court – Taxes on Bitcoin News
Profits from the sale of cryptocurrencies such as bitcoin are taxable, according to two rulings from Denmark’s Supreme Court. The rulings in the cases, which involve crypto purchases and payments as well as income received from bitcoin mining, uphold decisions by lower courts.
Denmark’s Supreme Court considers crypto gains to be taxable according to current law
Profits from the sale of bitcoin are taxable in Denmark, the country’s highest court has ruled in two separate rulings that were published on Thursday. Both decisions are in lawsuits against the Danish Ministry of Taxation and confirm judgments handed down by lower bodies.
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 person sold them in 2017 and 2018 at higher prices.
According to the court in Copenhagen, the bitcoins were acquired for speculative purposes, and their sale cannot therefore be exempted from taxation under the State Tax Act. Then the crypto received as payment constituted turnover for the man’s non-business enterprise, which also triggered tax liability.
The same applies to the second case, where coins were paid out as a reward for obtaining computing power for mining digital currencies between 2011 and 2013. The miner sold some of the earned crypto at a profit in 2018. A statement cited by Bloomberg elaborates:
The Supreme Court assumes that, as a general rule, bitcoin is only acquired with the aim of being sold and to a limited extent used as a means of payment.
The decisions that profits from the sale of the cryptocurrency are taxable will probably set precedence for the tax treatment of crypto investments in the Scandinavian country.
National authorities in the EU have taken steps to clarify the taxation of crypto holdings and related profits. In December 2022, the Italian government introduced a 26% tax 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 not yet enforced.
What do you think of the judgments from the Danish Supreme Court? Let us know in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons, ArDanMe / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
