The tax agency in Denmark, Skattestyrelsen (SKAT), have increased disciplinary actions towards citizens who transacted with Bitcoin through the use of a crypto exchange in Finland and refused to disclose such business transactions.
The Tax Agency in Sweden released information stating that 2,700 Danes bought bitcoins valued at $5.80 million from the exchange and went ahead to sell them for $6.1 million. The result of this was unreported Bitcoin transactions worth about $12 million from the year 2015 to 2017
SKAT’s directorate, in the person of Karin Bergen, agreed that the agency is looking into the transaction figures and will eventually hold accountable everyone who chose to hide their Bitcoin offshore trades. Bergen said:
“If you have traded with bitcoins on the specific Finnish bitcoin exchange and have not specified any winnings, then you can hear from us so we can get your taxes in place.”
Current reports from the local media reveal that IT experts and Danish tax inspectors are working together to find out the amount of profit and loss Bitcoin traders made. It has been observed that many traders made good returns in their investments in excess of 1 million Kroner while some weren’t so lucky in their investments.
SKAT’s personal data department chairman, Ole B. Sørensen, noted:
“There are two types of trades.” He continued, “One is what I want to call a curious trade, which is about a few thousand dollars. And then there are those who have been trading for some enormous amounts.”
According to more reports, SKAT has also reached out to the Bitcoin industry big players. Plans are in place to chase after a lot more of them in months to come.
“It’s probably just the tip of the iceberg,” Bergen said. “Although the Finnish company is a relatively small bitcoin exchange, the information they have revealed is a precious source, which clearly shows trends and patterns in the area.”
As it is, citizens of Denmark who have been involved in bitcoin trading for some years may have to answer to the law at some point.
A Bitcoin expert and lawyer from Denmark named Payam Samarghandi acknowledged that in Denmark, Bitcoin is taxable. The Danish tax agency enforces charges on every profit gotten from the buying and selling of a property, based on the Tax Act of 1903. SKAT sees the taxation of Bitcoin as an expensive vase or painting.
“It’s a little bit like Kählervasen, a vase whose value increased five years after the first purchase,” said Samarghandi. “At the time of purchase, the owner didn’t need to pay any tax on it. But when he sold it for at a significantly increased rate, then the profits he made became taxable.”
Still, a vase or a painting cannot be used to make an online payment. On the other hand, SKAT knows that putting Bitcoin holders in the same category with speculators and users will be a hard task.
A Tax Council member named Louise Schack Elholm made a statement regarding cryptocurrencies, saying that sometimes they are bought for other uses than speculation.
“But,” she continued, “It will be in sporadic cases.”