Denmark’s Tax Authority has been authorized by the country’s Tax Council to obtain information regarding all trades of cryptocurrencies across three domestic crypto exchanges. An official announcement published on the agency’s website reported this development on Jan. 14.
The authorization means that three unspecified Danish crypto exchanges now have legal disclosure obligations to hand over identity information that includes names, addresses and personal tax numbers, as well as details of all crypto transactions made on their platforms between Jan. 1 2016 to Dec. 31 2018.
The Tax Authority has said it will use the information to ensure that citizens who have traded in crypto have duly paid the correct tax. Karin Bergen, a director at the agency, is quoted as saying that its fresh mandate will give it completely new opportunities in relation to its control in the cryptocurrency sector.
Any information pertaining to foreign citizens and businesses’ identity and transaction data will reportedly be passed over to their respective countries’ tax authorities.
According to the announcement, the first adjustments to tax treatment for specific cases will be made based on the newly-acquired information, and are reportedly due to be sent before summer 2019. These will reportedly include whether individual traders’ or businesses’ trades are required to be included in their declared taxable income.
Bergan has further stated that “without going too far, I think one can say that [crypto] is a big market that we need to look at more closely.”
Last December, an article published by The Wall Street Journal (WSJ) cannily advised American investors to sell and then repurchase their Bitcoin (BTC) as a strategy to save on taxes.
Back in July 2017, the IRS had required that major United States crypto Coinbase hand over detailed information on every one of its then over 500,000 users in an attempt to prevent tax evasion. However, a court order in November 2017 reduced this number to around 14,000 high-transacting users, which the platform later reported as 13,000.
As reported, data released ahead of the close of the preceding tax year indicated that just 0.04 percent of tax filers were reporting capital gains from crypto investments to the IRS.