By Michael Scott
The Denmark Tax Law Council mulls new cryptocurrency taxation that could reshape digital assets if the 42% tax rate applies to the realized and unrealized gains in 2026.
- The Tax Law Council suggests a new crypto taxation approach, though Denmark has yet to pass the law.
- The primary agenda suggests inventory taxation to subject crypto to treatment similar to stocks and bonds at 42%.
- The proposal, scheduled for enforcement in 2026, eyes consistent crypto taxation and allows loss write-offs.
In a recent report, Denmark’s Tax Law Council considers introducing new crypto taxation rules that could potentially alter digital assets taxation in the country. The Wednesday, Oct. 23 report outlines several approaches to cryptocurrency taxation whose implementation would possibly start in 2026.
The 93-page report captures Tax Minister Rasmus Stoklund confirming the recommendations submitted by the Tax Law Council to deliver a reasonable taxation of crypto. The suggestion will factor in investors’ gains and losses.
Denmark Eyes Harmonized Crypto Taxation
Stoklund hails the submissions as the outcome of several years of work studying different taxation approaches since 2021. In particular, the report outlines three different models showing a preference for the inventory approach.
The inventory model subjects all assets – crypto, stocks, and bonds – to a single valuation approach. The resulting value change is subject to taxation.
A notable scope of the new framework is introducing a 42% tax rate on capital gains. The feature aligns with changes recently introduced by Italy, which has adjusted the cryptocurrency capital gains tax from 26% to 42%.
The inventory taxation model mandates that Danish citizens settle taxes due on the crypto holdings since the onset of acquisition. The approach applies regardless of whether the holder sold the digital assets.
The proposed taxation framework suggests that the investors are liable to pay taxes on the unrealized gains. It mandates them to treat the portfolio as if sold on a specific date annually.
The key feature of the proposal is resolving the current inequities within the system. The proposed framework will enable loss deduction against gains on digital assets. Such provision is absent in the present crypto tax structure. The new framework would accommodate loss deduction that currently is missing in crypto tax structure.
Proposals to Increase Transparency in Crypto Taxation
The Tax Law Council considers the proposal to deliver increased transparency besides the reporting requirements. The framework would obligate the crypto service providers to disclose user transactions. The government plans disclosure of share investor data internationally in three years.
Notably, some news outlets have erroneously reported that the proposals are now law in Denmark. The proposal is at the recommendations phase, as the Danish Parliament will only receive the bill at the onset of next year. Such will undergo careful examinations before reaching further decisions.
The Tax Law Council’s recommendations are a constituent of the broader efforts to ease the tax system and eliminate the unfair treatment of crypto investors. The existing rules subject some crypto asset holders to heavy taxation.
The proposed system has all digital assets taxed and guided by the same rules. The authorities seek to eliminate disparities in how crypto assets are treated for tax purposes.
The Tax Law Council has not confirmed the implementation timeline with the tentative January 2026 schedule. The period will offer financial institutions and investors familiarity with the changes.
The recommendations seek to address international cooperation in digital asset taxation. As such, it captures provisions guiding investor data sharing across the European Union. It prepares Denmark for coordinated cryptocurrency regulation. Minister Stoklund reiterated the essence of clearer and more suitable rules. He is optimistic about presenting the bill in the Danish Parliament.
The quest for a clearer crypto taxation framework is not an isolated development for the Danish government. Instead, it aligns with the recent development of a comprehensive digital asset taxation framework. Other countries, including Italy and the Netherlands, are undertaking similar approaches to handle digital asset taxation.
The Tax Law Council proposal represents Denmark’s attempt to bring parity and fair treatment to the crypto investors’ taxation. Also, it addresses the concerns about tax evasion and regulatory oversight in the crypto market.