Cryptocurrency
Cryptocurrency
Taxation of cryptocurrency – avoid the pitfalls
In recent years, the tax authorities have had a strong focus on cryptocurrency. With the growing interest in digital assets such as Bitcoin, Ethereum, stablecoins, etc., the Danish Tax Agency has intensified its monitoring of crypto transactions—and in nearly 7 out of 10 audits, the Tax Agency has found errors.
The errors are often due to missing reporting, incorrect valuation, or uncertainty about how different types of cryptocurrency should be taxed. Therefore, it is important to understand the rules—both as an individual and as a business—since discovering mistakes later can have significant financial consequences.
Taxation for individuals
For individuals, gains on cryptocurrency are taxed as personal income at up to 53%, while losses can only be deducted at a lower tax value of around 26%.
Stablecoins are taxed as capital income under the mark-to-market principle, where gains or losses must be calculated each year—regardless of whether the currency has been sold. This can result in a significant liquidity burden.
Income from staking and airdrops is also taxed as personal income, while mining is typically considered a hobby activity. In this case, profits are taxed as personal income, but losses cannot be deducted.
Taxation for companies
For companies, gains and losses on cryptocurrency are taxed as part of ordinary corporate income at a rate of 22%. However, the wallet must be registered in the company’s name—otherwise, the investment is taxed personally for the shareholder.
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Danish Tax Agency audits
The Danish Tax Agency is increasingly obtaining data from Danish crypto exchanges and cross-checking it with investors’ reports. Errors can lead to additional tax assessments and, in the worst case, criminal proceedings. A fine typically amounts to 1–2 times the evaded tax.
Get advice on cryptocurrency taxation
Accurately calculating gains and losses on cryptocurrency can be complex, and the Danish Tax Agency has a sharp focus on the area. At Bachmann/Partners law firm, we have extensive experience in both advising on and handling cases related to cryptocurrency taxation—including acting as defenders in fines and criminal cases.
If you are unsure how your cryptocurrency transactions should be treated for tax purposes, or if you have been contacted by the Danish Tax Agency, you are welcome to contact us for an assessment of your case.
Contact us today for a non-binding meeting about your case.
Contact us today for a non-binding meeting about your case.
Regardless of your situation, we can help you create the most advantageous solution. We have Denmark’s best
team of lawyers and experts, so you can be confident you are receiving the best advice.
We have offices in Copenhagen, Aarhus, and Aalborg, so you always have access to tax advice near you.
Contact us today
- +45 33 23 90 90
- kontakt@bachmann-partners.dk
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