Denmark's World's First Crypto Tax on Unrealised Gains

Denmark is set to introduce a tax reform by imposing a tax on unrealised cryptocurrency gains starting 1 January 2026.

This initiative aims to integrate digital assets like Bitcoin into the broader financial tax system, treating them similarly to traditional investment assets such as stocks and bonds.

The proposed 42% tax will apply to all crypto holdings, including those acquired as far back as Bitcoin's launch in 2009.

Unlike physical or fiat-backed assets, cryptocurrencies will now fall under the same rules as other investments, even if the assets remain unsold.

Tax Minister Rasmus Stoklund has voiced strong support for the measure, signalling the government's intent to bring digital currencies into alignment with existing tax structures:

“Throughout recent years, there have been examples of Danes who have invested in crypto-assets being heavily taxed. That is why I am pleased that the Tax Council has today submitted some elaborate and up-to-date recommendations. The council's recommendations can be a way to ensure more reasonable taxation of crypto investors' gains and losses.”

Denmark to Implement More Regulatory Measures

Denmark's new crypto tax aims to tackle the challenges of taxing digital assets, which have long been difficult to regulate due to their decentralised nature.

To address these complexities, the government plans additional measures, including international data sharing on Danish crypto investors starting in 2027.

A proposed bill, expected in early 2025, will require crypto service providers to report customer transactions, helping Denmark regulate its 300,000 crypto holders and reduce tax evasion.

Investors will also be allowed to offset losses in one cryptocurrency against gains in another, or gains from financial contracts, correcting the current imbalance that heavily taxes gains without similar relief for losses.

Denmark's New Yet-to-Implement Crypto Tax Bill Draws Backlash

Denmark's decision to tax unrealised crypto gains has sparked significant backlash and mockery from the crypto community.

Critics argue that this move sets a risky precedent by penalising long-term holders and stifling innovation.

Taxing unrealised gains, which are inherently volatile and theoretical, introduces uncertainty and could deter investment.

Many fear this could drive crypto entrepreneurs and businesses away from Denmark, ultimately harming the economy.

Additionally, this policy risks capital flight, a slowdown in blockchain innovation, and a loss of global competitiveness in the rapidly evolving digital asset space.