Bitcoin profits are taxable, Denmark's Supreme Court says
Quick Take
- Denmark’s Supreme Court said selling bitcoin carries a tax liability.
- This liability applies to both traders and miners.
The Supreme Court of Denmark ruled that profits from the sale of bitcoin constitute a taxable event, upholding a previous ruling by the Danish High Court.
The Supreme Court considered two instances of profiting from bitcoin. The first involved an entity that acquired bitcoin from a third party and the second involved miners who earn bitcoin as a reward for securing the network. The Court ruled that both entities would have a tax liability if they sold their coins.
For people in the first instance, the court ruled that their bitcoin purchase was speculative in nature. As such, any sales by them should not be tax-free according to Denmark’s State Tax Act. As for miners, the Supreme Court ruled that their bitcoin acquisitions via mining constituted revenue and should attract taxes if they sell.
In 2018, Danish tax authorities identified 2,700 individuals owing taxes on bitcoin profits. At the time, it was reported that these individuals sold $8 million worth of bitcoin via a Finland-based exchange.
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