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The country’s supreme court released two decisions for cases in which different crypto users gained profits from sales of BTC “made for the purpose of speculation” and mining.
The Justices of the Supreme Court of Denmark have handed down two judgements on whether the sale of Bitcoin (BTC) under certain circumstances qualifies as a taxable event.
In a March 30 notice, Denmark’s Supreme Court said a party who gained profits from selling Bitcoin acquired through several purchases and donations was required to report the sale as a taxable event, adding the purchase was “made for the purpose of speculation.” In a separate case, the court ruled a user who mined their own BTC and later sold the coins would be subject to the same tax consideration.
Both cases considered by the supreme court involved the acquisition of BTC between 2011 and 2013, with sales between 2017 and 2018, suggesting a price difference in the thousands of dollars. The court cited sections of the country’s National Tax Act, noting it had considered the first seller’s intent to eventually sell the coins based on a post in a 2011 Bitcoin forum.
“The Supreme Court finds that the received Bitcoins must be considered assets acquired with a view to later turnover as an integrated part of [the first party]’s business with the development and operation of software for Bitcoins,” said the ruling. “They cannot be considered at the time of sale to have been transferred to be [their] private property or assets. On that basis, the Supreme Court finds that the relinquishment of the Bitcoins received constituted revenue in [their] non-commercial business. Sales therefore trigger tax liability.”
Related: What is crypto tax-loss harvesting, and how does it work?
Coincub reported in September 2022 that gains earned from crypto in Denmark could incur a tax rate of roughly 37% but also up to 52% depending on whether the user has a high income. This would place the country well above crypto tax rates in the United States subject to its capital gains laws — between 0% and 37% depending on whether the taxpayer sells assets held for more or less than a year and their income bracket.
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