The Supreme Court of Denmark has decided in favor of taxing earnings from the selling of bitcoins. This decision reaffirms another recent decision of the Supreme Court of Denmark. The Supreme Court of Denmark reviewed two instances involving earnings from the selling of bitcoins in reaching its decision. In the first instance, a person obtained bitcoins from a third party. In the second case, they are minors who are compensated with bitcoins in exchange for safeguarding the network.
The Supreme Court of Denmark ruled that if these two entities sold their crypto-currencies, they would be subject to taxation. To clarify its judgement, the Danish Supreme Court argues that in the first case, the purchase of bitcoins was speculative. In reality, each sale of these crypto-currencies must be accompanied by a tax, which the Court bases on Danish state tax legislation.In the instance of miners, the Supreme Court of Denmark rules that mining for bitcoins is a kind of revenue. If these bitcoins were to be sold, they would be liable to taxation.
It Seems that The Supreme Court of Denmark’s Decision has its Reasons
The Danish tax authorities discovered roughly 2,700 individuals who were profiting from their bitcoin operations in 2018. These individuals, according to theauthorities, must be subject to tax regulations. This is especially important given the tremendous revenues made by these operations. Furthermore, it was claimed at the time that these individuals had sold $8 million in bitcoins through a Finland-based exchange.
The Supreme Court of Denmark points out that this judgement only applies to bitcoins purchased between 2011 and 2013 and then staked between 2017 and 2018. This judgment is consistent with Denmark‘s tax policy, which is noted for its strictness. The government’s goal is to keep the country from becoming a tax haven. Hence, income created by a cryptocurrency-related activity will now be taxed at a rate of 27% if they do not exceed 58,900 DKK, or around $8,630. If your income surpasses this threshold, your tax rate will be 42%.