The Supreme Court of Denmark, Højesteret, has issued two judgments regarding bitcoin (BTC ) and whether it should be subject to taxation under certain circumstances.
In an announcement on March 30, 2023, the court ruled that crypto traders who purchased BTC through different channels and donations are required by law to pay taxes on the profits generated from the sale of the crypto asset.
Purchased Bitcoins for Speculation
The notice follows two cases filed against the country’s taxation ministry involving crypto-tax considerations. One of the cases involved a trader who acquired bitcoin between 2011 and 2015 from third parties for using his software solutions dedicated to Bitcoin. The trader sold the crypto assets at a profit two years after the acquisition.
The second case involved someone who acquired bitcoin through mining between 2011 and 2013. Like the first case, the trader also sold the assets at a higher rate than the price at which the assets were obtained.
The supreme court passed the same judgment on both cases, stating that the crypto assets were purchased based on speculation. The judge further noted that the first seller’s intention to sell the virtual assets was influenced by a post published in 2021 in a Bitcoin forum.
Sales Results in Tax Reliability
According to the court document, the magistrate said that the BTC received should be viewed as assets acquired for future turnover as an integral part of the first party’s business involving software development and operations for Bitcoins.
Thus, they cannot be considered as having been transferred to their private ownership or assets during the sale. Therefore, relinquishing the received crypto assets is considered revenue in their non-commercial business, and sales will result in tax liability.
With the latest ruling, Denmark has joined a growing list of countries imposing taxes on crypto revenues.
While the Supreme court did not disclose the percentage placed on crypto incomes, the Danish country is known for having high tax rates.
According to reports, investors in the nation can pay between 37% to 52% on gains generated from crypto, depending on the person’s portfolio.
In America, crypto traders must pay 0 to 37% taxes depending on the person’s income, while Indian traders are required to pay 30% in taxes on their crypto profits.
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