Denmark is allegedly considering changing its cryptocurrency legislation. According to Bloomberg, a total of 16,000 people and companies in Denmark traded cryptocurrency between 2015 and 2019, with 67 percent of those reports filed incorrectly.
While Denmark is known for being liberal in economic and social policy, the country’s regulatory framework for Bitcoin is far from complete. While there is no special regulation dealing with cryptocurrencies, they are governed by alternative investment funds, prospectuses, and money laundering laws.
On Tuesday, the Danish Tax Ministry stated that the country’s current tax code isn’t built to deal with cryptocurrencies’ unique issues. Despite this, Denmark is enforcing cryptocurrency taxation and penalizing individuals who file wrongly.
According to Morten Bodskov, the country’s tax minister, the purpose is to be “vigilant and guarantee that our rules are up to date, limiting errors and fraud.”
Lars Rohde, Denmark’s central banker, said last month that he may be inclined to ignore bitcoin, but that it was not a threat to the central bank at the time. Nonetheless, according to the ministry’s statement, Denmark’s government will soon begin to define cryptocurrency, first describing the issues that these cryptocurrencies represent and then selecting what regulation to impose.
In a similar vein, in 2019, Denmark sent letters to crypto tax evaders requesting various documentation to ‘assist’ them in determining their capital gains. This time, it appears that the government is taking regulation more seriously since many persons have been reported to Denmark’s crimes section for allegedly violating the country’s tax legislation.
Some governments worldwide are beginning to crack down on crypto tax avoidance. The United States is increasing its oversight of international crypto investors who may utilize US exchanges as a haven from their home nations’ tax obligations.