Denmark Council Proposes New Crypto Bill To Tax Unrealized Gains

Denmark plans to introduce a new crypto bill that could impact crypto market participants.The Danish Tax Law Council proposesimplementing a bill to tax unrealized gains and losses on investors' crypto assets holdings from January 2026.

This move will mark the first of its kind in crypto tax bills. It aims to place digital assets in the same line with the taxation of traditional financial assets.

Danish Tax Council Recommends New Bill To Tax Unrealized Crypto Gains

The Danish Tax Law Council has proposed a new crypto bill to tax unrealized gains on digital assets held by investors. The council recommended the new bill through a 93-pagereportfocused on crypto asset taxes.

If approved, the proposed tax bill will see all crypto investors in the country pay taxes on their Bitcoin or other crypto holdings.

Notably, the taxation will count from the day they acquired the assets, whether they sold them or not. Danish investors will become liable to taxation on their overall crypto portfolio.The taxing will apply to unrealized gains each year by assuming they sold their assets on a set date in the year.

According to the report,the council proposed a 42% taxation on unrealized gains from digital assets investors acquired since Bitcoin's inception in January 2009.

Rasmus Stoklund, the Tax Minister, said the new bill will establish a more straightforward approach to crypto taxation in the country. He also noted that several Danish crypto investors suffered unfair taxation via the common capital gains tax before now.

Further, Stoklund stated: 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."

The Tax Minister also added that the new bill will only be introduced to the Danish Parliament in early 2025. Moreover, the Tax Council recommended that the rules not be effective till January 1, 2026, if the parliament approves the bill.

New Bill Lays Out Three Models For Crypto Taxation System

The proposed bill laid out three distinctive models the country could deploy for taxing crypto assets. These include inventory taxation, capital gains tax, and warehouse taxation.

Under inventory taxation, the bill considers an investor's entire crypto portfolio a single inventory." So, it recommends taxation on the portfolio at a specific date each year, regardless of whether the investor sold the assets.

Again, the bill recommends the loss write-off approach for investors. This method allows investors to write off losses on gains they accumulated from other crypto, just like in traditional investments.

The bill also lays out a 42% capital gains taxation approach on unrealized gains. This move aligns the country's crypto taxation with thatfor traditional assets.

Moreover, the report disclosed that the proposed bill would demand the cooperation of crypto assets service providers in the country. This means that crypto exchanges and trading platforms would make information about their clients' transactions accessible to all EU countries.

Besides Denmark, some countries have reformed their taxation on assets, physical and digital. Italy disclosed plans tospikeits capital gains taxation on Bitcoin and other crypto assets from 26% to 42%.

Last month, Kamala Harris, the US Vice President, and Democrat presidential candidate, authorized a 25% tax policy on unsold assets.

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