The Danish Ministry of Taxation is reportedly considering revising the country’s tax law to address the challenges posed by cryptocurrencies. Denmark’s tax authority is concerned about the increasing risk of fraud and common mistakes when submitting cryptocurrencies.
Denmark is revising tax law to deal with cryptocurrency
Denmark is considering revising its tax laws to deal with cryptocurrency after it was found that two-thirds of bitcoin and other cryptocurrency transactions were improperly taxed, Bloomberg reported on Tuesday.
The country’s existing tax regime is insufficient to cope with the challenges posed by crypto assets, said the Danish tax ministry. The authority announced in a statement on Tuesday that the current tax code “dates from 1922 and therefore does not take into account financial cryptocurrencies”. The ministry cited an increased risk of fraud and widespread tax return errors related to crypto transactions.
Denmark will identify specific challenges for the taxation of cryptocurrencies and then decide what to change in the legislation.
Morten Bodskov, Denmark’s Minister for Taxation, said the goal is “to be vigilant and ensure that our regulations are up to date and limit errors and fraud”.
The publication found that around 16,000 people and businesses in the country traded cryptocurrencies between 2015 and 2019, but 67% of these transactions were not accurately reported. In February, Skattestyrelsen, the Danish tax authority, said it had raised $ 4.9 million from crypto investors and reported 48 people suspected of violating the country’s tax laws.
In December 2019, Skattestyrelsen reportedly sent warning letters to 20,000 cryptocurrency owners asking for a full breakdown of all their transactions and asking them to correct any previous reports.
Last month, Denmark’s central bank governor Lars Rohde said that cryptocurrency is not currently a threat to the central bank.
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