It is generally considered speculation when private individuals trade in cryptocurrencies, meaning that the currency is bought with a view to making a profit on the sale.

As a result, you normally have to inform the Danish Tax Agency (Skattestyrelsen) of the profit or loss you make when you sell your cryptocurrencies.

Speculation means that the purpose of buying cryptocurrencies is to make a profit. Cryptocurrency trading is generally considered speculation and that is why you should inform the Tax Agency by stating your profit or loss in your tax assessment notice when you sell your cryptocurrencies.

In case of doubt, we make an overall assessment taking various details related to the purchase into consideration.

Such details could be:

  • What currency did you buy – bitcoins for example?

  • What can it be used for?

  • Is the currency suited for speculation – rise or fall in exchange rate for example?

  • Is it possible to sell the currency with a profit?

  • Why did you buy the currency?

  • Are you the owner of the currency?

You can ask for a specific assessment if you are unsure

If you are unsure whether you are considered to have bought cryptocurrencies with a view to speculation, you can request a binding ruling containing a specific assessment.


Request a binding ruling (currently in Danish)

When you sell cryptocurrencies, you should calculate whether you have made a profit or a loss.

Profit or loss is the difference between the purchase price and the selling price.

If you have made several purchases, you should generally calculate your profit or loss according to the First In First Out Principle (FIFO Principle). This means that the first bitcoins you bought are also the first you sell.

fifo

There may be exceptions from the FIFO Principle and you are welcome to contact us if you need further information.

Please note that you enter any profit or loss in your tax assessment notice.

Examples of calculations according to the FIFO Principle

You bought 10 bitcoins at a value of DKK 1,000 apiece in January and 10 bitcoins at a value of DKK 2,000 in February.


You sell 8 of these at a value of DKK 3,000 apiece

Purchase price: 8 x DKK 1,000
DKK 8,000
Selling price: 8 x DKK 3,000
DKK 24,000
Profit: DKK 24,000
- DKK 8,000
DKK 16,000

You should enter the profit in your tax assessment notice in box 20.

At a later point, you sell the remaining 12 at a value of DKK 1,000 apiece.

Purchase price: 2 x DKK 1,000
+ 10 x DK 2,000
DKK 22,000
Selling price: 12 x DKK 1,000
DKK 12,000
Loss: DKK 12,000
- DKK 22,000
- DKK 10,000

You should enter your loss in box 58 in your tax assessment notice.

Be sure to enter both profit and loss

If you have both made a profit and a loss on your transactions, you should normally enter your profit in box 20 in your tax assessment notice and your loss in box 58 in your tax assessment notice, respectively. And as a result, you should not set off a loss against any profit.

Exceptional offsetting of loss against profit

If, for example, you bought 10 bitcoins in one transaction and you sell these bitcoins in several transactions during the same income year, you can set off your loss against any profit you have made.

  • If you are showing a profit after offsetting your loss, you should enter the profit in box 20 in your tax assessment notice.
  • If you are showing a loss after offsetting your loss, you should enter the profit in box 58 in your tax assessment notice.

You cannot set off loss against profit from different kinds of cryptocurrencies bought in several transactions and sold in the same income year.

Please contact us if you need further information about this.

Correcting your tax assessment notice

  1. Log on by using your NemID
  2. Click'Ret årsopgørelsen/oplysningsskemaet' (Correct your tax assessment notice/tax return).
  3. box 20 'Anden personlig indkomst uden AM-bidrag' (Other personal income not subject to labour market contributions).
  4. Enter your loss for the year in box 58 'Øvrige lønmodtagerudgifter' (Other employment-related expenses). Please note that you should not deduct your personal allwance stated next to the box.
  5. Click 'Godkend' (Accept).
  6. You have now corrected your tax assessment notice.

If you want to avoid outstanding tax you can state your expected profit or loss in your preliminary income assessment.

Correcting your preliminary income assessment

  1. Log on by using your NemID
  2. Enter your expected profit for the year in field 250 'Anden personlig indkomst uden AM-bidrag' (Other personal income not subject to labour market contribution).
  3. Enter your expected loss for the year in field 449 'Øvrige lønmodtagerudgifter' (Other employment-related expenses). Please note that you should not deduct your personal allowance stated next to the field.
  4. Click 'Beregn' (Calculate) and then 'Godkend' (Accept).
  5. You have now corrected your preliminary income assessment.

When you buy and sell cryptocurrencies, you should keep certain information as documentation of your profit/loss calculation.

Such documentation could be:

  • Vouchers on orders, purchases, sales and payment

  • E-mails and other correspondence

  • Information about your wallet provider

  • Basis of agreement with your wallet provider

  • Information about the number of your wallet, meaning the public code

  • Basis of agreement in force at the time of purchase and possible subsequent changes

  • Printout of your cryptocurrency holdings

  • Bank account statements related to purchases and sales of cryptocurrencies

  • Printout of your transactions

  • Possible other relevant documentation of your purchases and sales to verify your ownership

If you move to Denmark

If you move to Denmark and become liable to pay tax to Denmark, you can request information about how your stock of cryptocurrencies will be considered for tax purposes. You do so by requesting a binding ruling from the Danish Tax Agency (Skattestyrelsen). This ruling is our decision on how you should handle your cryptocurrencies in relation to tax.

Request a binding ruling (Currently in Danish)

If you leave Denmark

If you leave Denmark and you no longer have a tax liability in Denmark, we will consider your stock of cryptocurrencies to be sold at market value on the day you left the country.

This means that if on the day you left Denmark the value exceeded the value at the time of purchase, you should enter the difference as profit in your tax assessment notice. If on the day you left Denmark the value was less than that at the time of purchase, the loss is tax-deductible.

If you cannot correct your tax assessment notice or if you have any questions about taxation of cryptocurrencies, please contact us.

We recommend that you contact us for a binding ruling if you are uncertain of what to do. Such a binding ruling is our decision on what the sale of cryptocurrencies means to your tax affairs.

If you have sold cryptocurrencies this year

If you sell cryptocurrencies this year and you are uncertain whether you will be taxed on the profit, please contact us for a binding ruling.

Request a binding ruling (Currently in Danish)

Request a binding ruling (Currently in Danish)

If you have sold cryptocurrencies prior to this year

If you have sold cryptocurrencies before this year without entering the profit or loss in your tax assessment notice, you should correct the relevant notice.

If you are unsure whether your profit or loss from previous years is subject to tax or entitles you to a deduction, you are welcome to contact us for a binding ruling.

Request a binding ruling (Currently in Danish)

Log on and correct your tax assessment notice