Denmark’s Tax Law Council has recommended a new bill that could tax unrealized gains and losses on cryptocurrency assets as early as 2026. This proposed tax reform aims to create clearer rules for Danish crypto investors and ensure fair taxation across all crypto holdings.
New Tax Models for Crypto Assets
The Council’s 93-page report outlined three possible methods for taxing crypto assets: capital gains tax, warehouse taxation, and inventory taxation. It leaned toward “inventory taxation,” where all crypto holdings are treated as a single inventory. Under this model, assets would be taxed at a set date each year, regardless of whether they’ve been sold or not. This means Danish investors could be taxed on unrealized profits and losses within their crypto portfolios.
According to the report, inventory taxation would treat crypto assets similarly to other financial holdings, such as stocks and bonds, taxing them as capital income. The Council’s goal is to create simpler, more consistent tax rules for crypto investors.
Addressing Current Crypto Tax Challenges
Danish Tax Minister Rasmus Stoklund pointed out that many crypto investors are currently taxed unfairly under the existing capital gains tax system. He emphasized the need for more straightforward rules to address these issues, stating that the new framework could correct these inequities.
While the recommendations are not final, and the bill has not yet been introduced to Parliament, social media users have misinterpreted the report as a sign the changes are definite. However, the report merely suggests potential pathways, and the Danish Parliament will ultimately decide whether to enact the new tax rules.
Impact on Crypto Investors and EU-Wide Reporting
If the recommendations are implemented, Danish crypto investors could see significant changes in how their holdings are taxed. The proposed tax law could require crypto exchanges and payment service providers to report user transactions. This would make data accessible to tax authorities across the European Union, aligning with broader efforts to regulate crypto assets and financial transparency in Europe.
The Tax Council clarified that the new rules, if approved, would not take effect until January 2026 at the earliest. Additionally, it’s unclear how the new tax policies would apply to existing crypto holdings.
A Global Trend Toward Crypto Taxation
Denmark’s move comes as other countries also explore stricter taxation on digital and traditional assets. In the U.S., Democratic presidential candidate Kamala Harris has supported a 25% tax on unrealized gains, while Italy is considering raising the capital gains tax on Bitcoin from 26% to 42% by 2025. These proposals reflect a growing international effort to regulate and tax crypto more rigorously.
Denmark’s Tax Minister expressed optimism about the upcoming discussions in the Folketing, the Danish Parliament, where the bill will be debated before its expected introduction in 2025. If enacted, these changes could reshape the way Danish crypto investors manage their assets, placing new responsibilities on both individuals and service providers.
