Denmark's Supreme Court sets precedent by ruling Bitcoin profits taxable
Court deems Bitcoin sales taxable under country's tax laws, following two cases presented before the apex court.
Denmark's Supreme Court has ruled that profits obtained from the sale of Bitcoin (BTC) are subject to taxation.
The court came to this decision after considering two cases that had been brought before it, with the ruling coming on 30 March. In the first case, the individuals in question had acquired their BTC holdings through purchases and gifts between 2011 and 2015. They later sold these assets at a profit in 2017 and 2018. In the second case, the BTCs were acquired through mining activities between 2011 and 2013 and sold for a profit in 2018. In both cases, the court ruled that profits from the sale of bitcoin were not exempt from tax.
According to a translated statement from the Supreme Court, investments in flagship digital assets such as BTC are speculative and subject to the country's tax laws. The court also ruled that BTC received as gifts or through mining 'constitutes turnover in their non-business enterprises'. As a result, profits from these enterprises trigger tax liability. The court did not specify the amount of tax to be paid on the profits.
Denmark is not alone in introducing a crypto profits tax in its jurisdiction. The Italian Senate has approved a 26% tax on capital gains from trading crypto assets above €2,000. A German court has also ruled that a private crypto investor must pay tax on his crypto profits.
More broadly, this decision by the Danish Supreme Court is part of a global trend of governments seeking to regulate cryptocurrencies and tax gains from their sale or trading due to the increasing popularity and widespread use of cryptocurrencies.