For the first time in the history of Denmark, activities of cryptocurrency exchanges will be subjected to scrutiny to ascertain how much tax is payable on each trade. The Danish Tax Council have authorized its tax agency to obtain specific trade information from three crypto exchanges.
According to a statement on the agency’s website on Monday, three exchanges are expected to submit information about all forms of crypto transactions on their platform from 2016 to 2018 to the agency. The requested data includes the names of traders, tax numbers, personal addresses, and some other personal data.
The agency claims that gaining access to these information “will ensure that citizens who have traded cryptocurrency have paid the right tax.” Also, taxes on transactions made by foreigners, whether individuals and corporate bodies will be exchanged with their respective countries authorities.
The personal tax director of the agency, Karin Bergen spoke in the statement about the revenue opportunities that the crypto market can offer to Denmark.
“Without going too far, I think you can say that this is a big market that we need to look into.” He added that the information which they requested for would afford the country a new avenue of control over her revenue.
Karin Bergen further revealed that the new initiative on collecting essential data from crypto exchanges was born by a report they received from Finland, about Danish citizens trading on a Finnish Bitcoin exchange.
Given the existence of such foreign transactions, the agency believes tax revenue from the sector will grow soon.
For the time being, the agency hopes that the collected data from the exchanges will be enough to determine how many traders there are and how much has been traded in the last three years. Armed with this, they can then decide if crypto trading profits should be added the countries taxable income or not.
Has Denmark just discovered an untapped source of tax revenue?