Denmark isn’t necessarily a country that one would associate with cryptocurrency activity. Interestingly enough, thousands of crypto holders in the country have received warning letters to avoid tax evasion.
This move is very similar to what the IRS is currently doing in the United States.
Denmark Wants to understand Cryptocurrencies
For Skattestyrelsen in Denmark, the current objective is to crack down on potential tax evaders.
The agency is convinced cryptocurrency enthusiasts are more prone to evading taxes compared to anyone else.
Skattestyrelsen received permission to collect user information from three domestic crypto exchanges earlier in 2019.
With the information allegedly spanning roughly 20,000 cryptocurrency users, all of these individuals has received a warning letter.
The timing of these letters is not random, as the tax reports in Denmark need to be filed by December 15 at the latest.
Although there is no evidence of anyone avoiding taxes through Bitcoin and altcoins, it is often better to prevent this type of activity rather than address it later on.
Similar to letter issued by the IRS, the information required by Skattestyrelsen touches upon users’ trading behavior.
The agency also wants to gain insights as to where the funds are coming from and going to.
Based on that information, the tax agency may decide to draft additional guidelines to calculate capital gains tax for cryptocurrency users.
The coming months may prove to be rather crucial for Bitcoin and altcoins in Denmark.