The Danish tax ministry is reportedly considering revising the country’s tax law to deal with the challenges posed by cryptocurrencies. The tax authority of Denmark is concerned about the increased risk of fraud and Pervasive filing errors involving cryptocurrencies.
Denmark to reform tax law to deal with cryptocurrency
Denmark is considering revising its tax code to deal with the cryptocurrency, after discovering that two-thirds of bitcoin and other cryptocurrency transactions were not properly taxed, Bloomberg reported on Tuesday.
Denmark’s tax ministry explained that the country’s current tax code is not sufficient to address the challenges posed by crypto assets. The authority said in a statement on Tuesday that the current tax code “dates back to 1922 and therefore does not take financial cryptocurrencies into account.” The ministry cited the increased risk of fraud, as well as widespread tax filing errors associated with crypto transactions.
Denmark will identify specific challenges to taxation by cryptocurrencies and then decide what legislation to change.
Denmark’s Taxation Minister Morten Bodskov explained that the goal is to “be vigilant and ensure that our rules are up to date and limit errors and fraud.”
The publication noted that between 2015 and 2019, approximately 16,000 people and companies traded cryptocurrencies in the country, but 67% of those transactions were not correctly reported. In February, Skatestirelsen, the Danish tax agency, said it had collected $4.9 million from crypto investors and reported 48 people suspected of violating the country’s tax code to its crime unit.
In December 2019, Skattestyrelsen reportedly sent The warning letter to 20,000 cryptocurrency owners asking for a complete stop of all their transactions and requesting them to correct all previous reports.
Last month, Lars Rohdes, governor of Denmark’s central bank said Cryptocurrencies currently do not pose a threat to central banks.
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