Denmark consider taxing unrealized gain on bitcoin.

[stadus]

Hm, taxing unrealized gain does seem problematic. It doesn't seem to be a common practice with cryptos. If it's capital gain tax, it makes sense that people pay it when profiting. If it's property tax, then people might declare their crypto holdings once, pay the tax and be done with it. That, of course, depends on a country and its laws around cryptos. That being said, it's only a bill, so it doesn't mean it will actually become the law.

This topic is getting interesting because we’re considering what would happen if this actually becomes a law, and we’re preparing for the potential consequences. It’s the first time I’ve read about Bitcoin holders being required to pay tax on unrealized gains, and if this gets approved, holding Bitcoin will become quite expensive. You’d have to set aside money for your yearly income tax, and if you don’t have enough cash to cover your liabilities, you might be forced to sell some of your stash to comply with the law.

I find this bill to be unfriendly to investors. If they’re treating crypto as property and imposing this tax, they should apply the same logic to other assets that appreciate over time, like land.

[kotajikikox]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Easy to assume that its citizens wouldn’t be happy. I mean the point of bitcoin is to be able to hold money and make transactions without sacrificing our data and privacy. I am sure that many holders are holding anonymously and would like it to stay that way.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

That is really odd but really beneficial for the government. The government is smart when it comes to taking money from its citizens but not doing anything to protect said citizens. I believe denmark citizens would prefer to hold bitcoin outside of the country as much as possible to avoid this.

[Natalim]

Easy to assume that its citizens wouldn’t be happy. I mean the point of bitcoin is to be able to hold money and make transactions without sacrificing our data and privacy. I am sure that many holders are holding anonymously and would like it to stay that way.

Definitely, everyone wants to stay as private as possible. The people who will be most affected by this law are likely those trading actively because the government will require exchanges to provide data on traders to ensure they collect the necessary taxes. However, since this is about unrealized gains, I don’t think it’s necessary for long-term holders to report their Bitcoin, as long as they know there’s no link from the exchanges regarding when they acquired it.

If there is a link, then not reporting could lead to bigger penalties and, worst case, even accusations of a crime.

That is really odd but really beneficial for the government. The government is smart when it comes to taking money from its citizens but not doing anything to protect said citizens. I believe denmark citizens would prefer to hold bitcoin outside of the country as much as possible to avoid this.

That’s quite complicated - holding assets outside of the country while living in that country. It’s really not feasible unless someone else is managing those assets, which I find very risky.

[Sanitough]

This would be on Bitcoin exchanges registered in their country right now because I don’t know if it could be considered if it is just within your wallet. I’m not that familiar yet with the bill that they are trying to propose. I would still consider the part where you converted into Fiat, and then that’s where you would tax it.

That will include both your exchange and personal wallet, as both count as your holdings. You’ll need to declare it, but it’s easier for them to track the Bitcoins you have on exchanges since those exchanges are regulated. For now, it’s important to look for ways to minimize compliance with this law if it gets passed, so you can reduce your tax liability. There’s a good chance the government will approve this bill since they’re always looking to increase their tax revenue collection.

[MarjorieZimmermanGinger]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

This sounds really weird because people have to pay taxes on the assets they hold and perhaps the bill’s rationale is completely devoid of any public benefit. So how is this going to continue, is their government trying to erode taxes for whatever justification?

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

The focus is not on the value of assets that have fallen so that taxes are lower, but this concept does not make sense at all if it is applied evenly because it speaks at the level of small ownership or large assets. The idea that the government is trying to develop there is not profitable at all and I think they only think about the benefits of taxes rather than considering alternatives that can be done by the wider community there.

Personally, I do not expect this to be the final decision and may need to be reviewed so that the regulation is more acceptable to some people involved in bitcoin and especially for the community there who are looking for alternatives to bitcoin for financial freedom issues.

[AsiaHODL]

Not really possible to tax what is in essence an extension of a person's body via a phase stored in their brain which interfaces with an algorithm in cyberspace...

[Jet Cash]

I can see Blackrock and other investment houses going for this. I'm sure they will be happy to fork out the tax on the £billions they hold in Bitcoin. They will probably speculate through and overseas exchange they own, and incur massive losses. That way they can get massive credits to reduce their profits on other assets like carbon credits.

[pooya87]

I can see Blackrock and other investment houses going for this. I'm sure they will be happy to fork out the tax on the £billions they hold in Bitcoin. They will probably speculate through and overseas exchange they own, and incur massive losses. That way they can get massive credits to reduce their profits on other assets like carbon credits.

Such laws are always for the "little guys" not for these trillion dollar companies that define the laws themselves! You can bet your ass they never mind such laws because if they did, they'd never allow it to be passed

[GigaBit]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

Some governments are still discouraging their citizens from investing in Bitcoin. Although they are not able to directly but indirectly their tax policy is showing that. Even if a person does not make profit by holding bitcoins, he also has to pay Tax. I don't know how reasonable such conditions can be.

Denmark is definitely one of the paradise states on earth. Where people are most interested in living. Their rules and regulation is promising but in recent times there are doubts about whether they will be able to implement the rules they are taking on taxing crypto. Although ideas have been proposed, no final decision has been made yet.

I am not against tax. But of course it will be supported by all if it is based on fairness. The Danish government is discussing taxing ordinary investors differently, with tax on those who benefit and a  tax on those who retain. Since this is not approved yet , I think they must change this policy. Lowering the tax level can be another good measure for this industry.

[eightdots]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

Some governments are still discouraging their citizens from investing in Bitcoin. Although they are not able to directly but indirectly their tax policy is showing that. Even if a person does not make profit by holding bitcoins, he also has to pay Tax. I don't know how reasonable such conditions can be.

Denmark is definitely one of the paradise states on earth. Where people are most interested in living. Their rules and regulation is promising but in recent times there are doubts about whether they will be able to implement the rules they are taking on taxing crypto. Although ideas have been proposed, no final decision has been made yet.

I am not against tax. But of course it will be supported by all if it is based on fairness. The Danish government is discussing taxing ordinary investors differently, with tax on those who benefit and a  tax on those who retain. Since this is not approved yet , I think they must change this policy. Lowering the tax level can be another good measure for this industry.

They want to tax everything. Governments that want to tax unrealized gains can change the investment status of many people. Crypto provides people with a lot of freedom and trying to limit this freedom with some laws is a difficult situation for investors. Everyone who invests can make a profit or a loss. It is not right for governments to tax people for investing.

Governments should make it easier for their citizens to invest in Bitcoin. How can they make it easier? Among the actions that governments should take is to ensure that crypto exchanges are legal and communicate with exchanges to ensure the safety of citizens investing in crypto.

Taxes are necessary for governments and should be implemented, but it is not right to tax unrealized income as stated here. Before such policies are implemented, people are informed and discussed and a path is drawn up as to whether the policy will be implemented or not. I think they will not implement such policies.

[asriloni]

I'm really welcoming it as long as they can also pay my unrealized losses as well.  

By the way, taxing unrealized profit on bitcoin is not acceptable by me. I thought that this was because unrealized profit is not a form of income. It's very stupid to tax someone who hasn't sold their private property, and get profit by selling it.

I think the government is acting like a modern dictator. They don't care about its citizens. It seems that law matters less now.

[FortuneFollower]

I'm really welcoming it as long as they can also pay my unrealized losses as well. 

By the way, taxing unrealized profit on bitcoin is not acceptable by me. I thought that this was because unrealized profit is not a form of income. It's very stupid to tax someone who hasn't sold their private property, and get profit by selling it.

I think the government is acting like a modern dictator. They doesn't care about its citizens. It seems that law matters less now.

It's more like it always was - if something is good for people and it's not regulated, it will be regulated eventually 

[Synchronice]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

And look at the percentage of tax...

Similarly, the Italian government mulled raising the capital gains tax specifically for Bitcoin holdings from 26% to 42% beginning in 2025.

In what world does it make any sense to set taxes on unrealized gain? Especially on as volatile asset as Bitcoin is? This is crazy! This will be an additional headache for every investor. Denmark should be aiming to motivate people to know what cryptocurrencies are and to invest in it but instead they make it less attractive for people while UAE does amazing job at attracting investors and businesses all over the world. This doesn't make sense and I hope they'll understand that everything should not be taxed.

[AsiaHODL]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

And look at the percentage of tax...

Similarly, the Italian government mulled raising the capital gains tax specifically for Bitcoin holdings from 26% to 42% beginning in 2025.

In what world does it make any sense to set taxes on unrealized gain? Especially on as volatile asset as Bitcoin is? This is crazy! This will be an additional headache for every investor. Denmark should be aiming to motivate people to know what cryptocurrencies are and to invest in it but instead they make it less attractive for people while UAE does amazing job at attracting investors and businesses all over the world. This doesn't make sense and I hope they'll understand that everything should not be taxed.

True, but either way, people can move. They have the choice - stay where you value is stolen form you by law, or move where you are treated best.

[Synchronice]

In what world does it make any sense to set taxes on unrealized gain? Especially on as volatile asset as Bitcoin is? This is crazy! This will be an additional headache for every investor. Denmark should be aiming to motivate people to know what cryptocurrencies are and to invest in it but instead they make it less attractive for people while UAE does amazing job at attracting investors and businesses all over the world. This doesn't make sense and I hope they'll understand that everything should not be taxed.

True, but either way, people can move. They have the choice - stay where you value is stolen form you by law, or move where you are treated best.

People can move, sure, but that's not the solution to the problem. When something inappropriate happens, people should unite and fight against it instead of leaving their own country. This is definitely not my problem, more likely the problem of Danish people but it's still sad that Denmark, one of the most amazing country with high quality of life, instead of adopting future technologies, is doing the opposite of it. After the ETF approval and interest from other countries, it should also be Denmark's interest to have as many Bitcoin holders as possible in their country. It sounds very strange for me that they do the exact opposite.

[avikz]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

And look at the percentage of tax...

Similarly, the Italian government mulled raising the capital gains tax specifically for Bitcoin holdings from 26% to 42% beginning in 2025.

It's absurd and against the interest of common people. While the world needs to introduce tax on extremely wealthy population, they are introducing taxes which will increase the burden of commoners. Also such kind of taxes will make the tax calculation extremely difficult. Not a good move!

I am sure that a lot of people will either move out of crypto or hide their crypto holdings from the government if this tax code becomes a law.

[Richbased]

And, what are you going to do with your Monero?  
Let's see the options:
- sell it, taxable registered event
- buy stuff with it, taxable registered event
- go to a country where is not taxable, thing you can do with Bitcoin
- print a piece of paper with your key and the words "I'm rich" and take it to your grave

You sound like one of those guys who is so happy he can pay for stuff with cryptocurrency anonymously then goes on to type his whole name and address in the delivery address and the warranty certificate.  
Also, these gains in Monero which the government would tax you on, are they in the same room as us now?

YES, I pay taxes when I sell my Monero, but I refuse to pay taxes on the Monero I hold.

Do you see the difference? 

I have too much money in crypto to have it visible to the government.

/Over&Out

Paying taxes on selling cryptocurrency is justifiable a bit but to pay taxes on the amount you hold is really an insane act by any government. Perhaps, it's only when you sell that they would know you have asset in crypto since they can get your personal details from the centralized exchanges you used as a medium to sell your crypto since your KYC documents are in their data.

I think anyone who have enough money should just use it and buy cryptocurrency where the government won't get to know the amount you got then anytime you need Fiats, you can just sell part of it. The only problem with this practice is volatility because if the price of any crypto you are holding falls at a time you needed to get Fiats it may be difficult which can even lead to selling at lost. Though for Monero, since the volatility is very slow, you won't record much losses if the price falls.

[m2017]

This new proposed bill sounds wild. It would mean holders have to declare their assets and pay taxes on any increase in value from their original purchase, even on unrealized gains. So, even if you’re just holding, you’d have to report it every year.

The state also wants its "piece" of your "pie" of imaginary profit.

Now, if the value drops, sure, maybe you’d pay lower taxes or get a tax offset, but it’s still odd. Think about it: you buy Bitcoin at $10,000, and over the next five years, it rises, so you’re paying annual taxes based on that value increase. But then, if the price tanks overnight and you sell in a panic, you’re at a loss - yet the government’s already pocketed tax from your unrealized gains.

You don't see the main positive "line" in this text. If the government plans to withdraw part of the unrealized profit, then this can only mean one thing. The government believes in the future growth of bitcoin.

Didn't you want recognition of bitcoin by governments? Well, get what you asked for. And it will get a "fat" piece of your investment, to which it has nothing to do (didn't allocate any money and didn't risk a single cent).

And look at the percentage of tax...

Similarly, the Italian government mulled raising the capital gains tax specifically for Bitcoin holdings from 26% to 42% beginning in 2025.

I like it! Did you really think the government would act in your interests and profits?

[AmoreJaz]

In what world does it make any sense to set taxes on unrealized gain? Especially on as volatile asset as Bitcoin is? This is crazy! This will be an additional headache for every investor. Denmark should be aiming to motivate people to know what cryptocurrencies are and to invest in it but instead they make it less attractive for people while UAE does amazing job at attracting investors and businesses all over the world. This doesn't make sense and I hope they'll understand that everything should not be taxed.

True, but either way, people can move. They have the choice - stay where you value is stolen form you by law, or move where you are treated best.

People can move, sure, but that's not the solution to the problem. When something inappropriate happens, people should unite and fight against it instead of leaving their own country. This is definitely not my problem, more likely the problem of Danish people but it's still sad that Denmark, one of the most amazing country with high quality of life, instead of adopting future technologies, is doing the opposite of it. After the ETF approval and interest from other countries, it should also be Denmark's interest to have as many Bitcoin holders as possible in their country. It sounds very strange for me that they do the exact opposite.

I believe they will soon realize that this initiative would be hard to implement as the gain/profit is quite subjective. If a crypto user knows how to manage the anonymity of his transactions, the government won't find out about his crypto involvements. Unless, the user will be using legit local crypto-exchanges as the government has a hold on them.