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Denmark cracks down on crypto traders after finding that two-thirds of local transactions made in Bitcoin and other cryptocurrencies are improperly taxed.
The country’s existing tax code, which is around a century old, is not designed to cope with the challenges posed by crypto assets, the Danish tax ministry said on Tuesday. It cited an increased risk of fraud and widespread errors in filings.
Denmark will first define the specific challenges that cryptocurrencies pose for tax authorities and then decide what to change in the legislation. In its opinion, the Ministry noticed that the current code “dates back to 1922 and therefore does not take into account financial cryptocurrencies”.
Morten Bodskov, the country’s tax minister, said the goal is “to be vigilant and make sure our rules are up to date and limit errors and fraud”.
Between 2015 and 2019, around 16,000 people and companies in Denmark traded cryptocurrencies. Of these transactions, 67% were not accompanied by an accurate tax return. In February, the Danish Tax Service said it had raised $ 4.9 million from crypto investors and reported 48 people to its crime department on suspicion of violating the country’s tax laws.