The Supreme Court of Denmark has recently declared, in an announcement issued this week, that any profits derived from Bitcoin transactions in the nation will now be subject to taxation. This decision, based on the assessment of two individual cases, aligns Bitcoin sales with Denmark’s existing laws concerning taxable income.
About the Cases
According to the first case, Between 2011 and 2015, Person A procured Bitcoin via purchases and third-party donations for their software infrastructure development business. From 2017 to 2018, these Bitcoins were sold for a considerable profit.
Furthermore, during a second case, another Person B was able to amass a significant quantity of Bitcoin through mining between 2011 and 2013 and then sold it in 2018 for a profit.
The document evaluates that Person A’s purchase of Bitcoin was for the purpose of speculation, and is therefore not exempt from taxation under the State Tax Act. Consequently, it is established that both A and B’s Bitcoin sales constitute turnover in their non-business activities, which triggers tax liability under the applicable state law.
Despite the ruling, the court did not offer further information on the exact tax rate applicable to the two transactions.
Denmark is Not the Only One
Denmark has recently joined the list of countries introducing taxation on cryptocurrency gains, with Italy approving a 26% rate on all crypto-related transactions exceeding €2k and Germany announcing that all private crypto investors must now pay taxes on their crypto profits.