Denmark Looks to Revise Tax Code to Address Widespread Use of Cryptocurrencies

The old tax code from 1922 is looking increasingly outdated thanks to bitcoin and other cryptocurrencies.

The Danish tax ministry, Skattestyrelsen, is reviewing its almost century-old tax code in an effort to address the proliferation of cryptocurrency investments. This follows an investigation from the ministry which revealed that up to two thirds of transactions using bitcoin and other cryptocurrencies aren’t properly taxed. 

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Playing Catch Up

The Nordic country’s tax chiefs will now begin the process of appraising the specific challenges which crypto is posing. They seek define those challenges and then redraft the legislation accordingly.

As reported by Bloomberg, a statement from the tax ministry said that the current code “dates back to 1922 and therefore doesn’t take financial cryptocurrencies into account.”

The Danish tax minister Morten Bodskov, explained that he goal is to be “vigilant and ensure that our rules are up-to-date and limit errors and fraud.”

In a four year period between 2015 and 2019, it is estimated that around 16,000 people and companies in Denmark traded some form of cryptocurrency. Of those transactions two thirds had no tax filing, or the filing was inaccurate. Earlier this year the Skattestyrelsen reported that it had collected $4.9 million from crypto users, reporting 48 people to the crimes unit for violations of the existing tax code.

Port Nyhavn, Copenhagen, Denmark – Source

Conclusion

As cryptocurrencies grow in popularity and adoption increases, countries around the world will need to re-examine their tax legislation and get more sophisticated in how they track financial transactions. For now, the authorities are playing catch up, but with attention rapidly focusing on the issue it will be much harder for crypto holders to escape scrutiny.

Source : bsc.news

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