Denmark plans to propose tax on unrealized cryptocurrency gains in upcoming bill

The Danish Tax Law Council has recommended a mark-to-market tax on crypto assets in a new report, which will be followed by a legislative proposal. This means that if the rules come into effect, crypto investors will pay taxes on unrealized crypto gains or losses. "So-called mark-to-market taxation is considered capital income and involves ongoing taxation, regardless of whether the crypto asset is sold or not," the council said. The tax council explained that taxation has been a challenge due to the nature of crypto assets, which are "not centrally regulated by entities such as governments or central banks." The council recommended that the new tax rules should take effect no earlier than January 1, 2026. In early 2025, the tax minister plans to present a bill that will incorporate the council's recommendations. The bill is expected to include a requirement for crypto service providers to report information on their clients' crypto asset transactions. Writing on X, Mads Eberhardt, senior crypto analyst at Steno Research, said that the tax rate on unrealized capital gains could reach 42%, which would affect not only cryptocurrencies acquired since then, but also cryptocurrencies acquired since Bitcoin's genesis block in January 2009.