Denmark’s Tax Council Proposes Bill to Tax Unrealized Crypto Gains

Denmark’s Tax Law Council has recommended a bill that could tax unrealized gains and losses on crypto assets held by Danish investors as early as 2026. The recommendation was outlined in the Council’s comprehensive 93-page report on crypto asset taxation, where three taxation models were considered: capital gains tax, warehouse taxation, and inventory taxation.

Danish Tax Minister Rasmus Stoklund noted concerns about the current capital gains tax model, arguing that Danish crypto investors have faced unfair tax burdens. He expressed support for simpler, clearer tax rules for digital assets, as the country seeks to reform its approach to crypto taxation.

The Council’s report leaned towards adopting an “inventory taxation” model, which would treat the entire portfolio of crypto assets as a single entity to be taxed annually, regardless of whether the assets were sold. Under this model, crypto assets would be taxed similarly to other financial instruments, such as stocks and bonds. This could result in Danish crypto holders being taxed on both unrealized gains and losses in their portfolios.

While some social media outlets misinterpreted the report as signaling imminent tax changes, the recommendations are not binding and will only take effect if passed by the Danish Parliament. The earliest date for implementation is January 1, 2026. Additionally, the report did not clarify how the rules would apply to existing crypto holdings.

The Council also recommended that crypto service providers, including exchanges, report transaction data to the authorities, with the aim of making this information accessible across the European Union.

These recommendations reflect a broader global trend of governments increasing scrutiny on crypto assets. For instance, U.S. presidential candidate Kamala Harris has proposed a 25% tax on unsold assets, and Italy is considering raising its capital gains tax on Bitcoin holdings to 42% by 2025.

While the Danish Parliament still needs to review and discuss the proposed bill, the initiative signals Denmark’s intention to align crypto taxation with broader financial asset regulations.

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