Denmark is set to introduce a pioneering tax reform through taxing unrealized capital gains on crypto, starting Jan. 1, 2026. It aims to bring crypto assets like Bitcoin in line with the taxation of traditional financial assets.
On Wednesday, the Danish Ministry of Taxation proposed that a 42% tax apply to unrealized gains from cryptocurrencies acquired since Bitcoin’s inception in Jan. 2009.
Tax Minister Rasmus Stoklund noted that many Danish crypto investors have been subject to unfair taxation under the standard capital gains tax. He suggested that new regulations should create a simpler approach for taxing crypto.
Denmark Tax Council Suggests Taxing Unrealized Crypto Gains and Losses
The council’s recommendations aim to address the imbalance between taxing gains and losses. Investors will be allowed to offset losses from one crypto asset against gains from another.
In addition, gains from crypto assets can be offset against losses from financial contracts. The reverse would also be possible. This approach, known as inventory taxation, classifies crypto transactions as capital income. As a result, they will be taxed continuously, even if they are not sold.
Further, it suggests that Danes with crypto assets could be taxed on both unrealized gains and losses. However, it does not clarify how far back the new tax rules would apply to existing crypto holdings.
Denmark to Propose Crypto Tax and Reporting Laws in Early 2025
In early 2025, the Minister of Taxation is expected to present a bill requiring crypto-asset service providers to report their clients’ transaction details for cryptocurrencies like Bitcoin, to share this data across EU countries. During the same period, the Minister will also propose a bill on taxing crypto-assets, incorporating the recommendations from the Tax Council.
“It is my opinion that there is a need for clearer and more appropriate rules in the area. That is why I am also looking forward to putting forward a bill and discussing it with the parties in the Folketing,” Stoklund said.
Recently, Italy revealed plans to raise its capital gains tax on Bitcoin and other cryptocurrencies to 42%. This increase, aimed at providing additional resources for families, youth, and businesses, represents a notable jump from the current 26% tax rate, which has been in effect since 2023.
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