The council’s 93-page report outlines three potential models for taxing crypto assets: capital gains tax, warehouse taxation, and inventory taxation. The preferred method, inventory taxation, would treat an investor’s crypto holdings as a single portfolio, assessing taxes based on the value of these assets at a specific date each year, regardless of whether the assets have been sold. This model aims to simplify the taxation process by enabling continuous taxation of capital income from crypto assets.
Tax Minister Rasmus Stoklund highlighted the need for a fairer and simpler taxation framework. According to the current regulatory process, many Danish investors in cryptocurrencies experience difficulties resulting from the matters and inconsistencies of the crypto transactions’ taxation terms. The new approach will also provide easier implementation and aim to be fairer when it comes to handling losses and gains because it will permit offsets of positions on different forms of financial instruments.