Denmark plans to propose taxing unrealized crypto gains in upcoming bill

Denmark’s Tax Law Council has recommended a mark-to-market taxation for cryptocurrency assets in a new report, which will be followed by a forthcoming legislative proposal.

The council said Wednesday in a translated statement that its recommendations “aim to eliminate the asymmetry in the taxation of gains and losses.” This means that crypto investors would be taxed on unrealized crypto gains or losses if the rules take effect. 

“The so-called mark-to-market taxation is treated as capital income and involves continuous taxation, regardless of whether the crypto assets are sold,” the council said. Mark-to-market taxation typically refers to taxes levied on the annual changes in the value of certain assets.

The Tax Law Council explained that taxation has been a challenge due to the nature of crypto assets, “which are not centrally regulated by entities such as a government or central bank." The council recommended that the new tax regulations should take effect no earlier than Jan. 1, 2026.

At the beginning of 2025, the Minister of Taxation plans to introduce a bill that incorporates the recommendations from the council. The bill is expected to include a requirement for crypto service providers to report information about their clients’ crypto asset transactions.

Mads Eberhardt, a senior crypto analyst of Steno Research, wrote on X that the tax on unrealized capital gains would likely be 42%.

“This will affect not only crypto acquired from that date but also crypto obtained as far back as the genesis block of Bitcoin in January 2009," Eberhardt said. "The gloves are off. This is a war on crypto."