Don't let yourself be scared of the law before there is one. Profits cashed out in Denmark are taxable after you deducted your running costs, i.e. electricity and hardware purchase.
Holding Bitcoin, even on a foreign exchange or other service is not!
Bitcoin is comparable to WOW gold, Amazon gift cards etc. If you cash out you pay 49% in tax after deducting costs. I called the taxwoman last year and she told me that it's perfectly legal to deduct costs as you are only taxed for your profits. (I didn't mention Bitcoin to her, but told that I produced digital goods I sold on the net, similar to a bedroom youtube popstar selling mp3's or a WOW player selling gold)
Likewise, if you deposited some of your own hard earned cash you paied tax for once on an exchange, that amount is also not taxed when you withdraw them. Balances held in bitcoin or other real currency is not subject to Capital tax either which is another 10%/ year saved as opposed to putting real money in a foreign real bank. As Bitcoin is not officially a currency and Bitcoin business are not banks. Most of them don't have license to operate as a financial business. So having Dollar balance is comparable to having a redeemable coupon with a specific business or Amazon gift certificates.
If you are an American citizen you are taxed after American tax rules, even if you are living in Denmark. If you don't have any income (being a student pehaps) and withdraw less than $6000/Y after costs, you file your tax return as "independent contractor" and is tax exempted. Lucky Americans!
Doing business with Bitcoins in Denmark is another matter. Someone else her who have experience with that can better clarify the pitfalls than I.
Ok you seem to know what your talking about I think. I do not fully follow your post.
Profits cashed out in Denmark are taxable. Profits from what? Business? Investing in the market? If I ran S.Dice for example, how would they even know? I am assuming your danish here?
If you are an American citizen you are taxed after American tax rules, even if you are living in Denmark. If you don't have any income (being a student pehaps) and withdraw less than $6000/Y after costs, you file your tax return as "independent contractor" and is tax exempted. Lucky Americans!
And what in the hell are you talking about here. I am a US citizen I pay Danish taxes. Maybe for people on a temp visa but that is not my case sadly.
It's quite simple:
1.The way you have gotten your Bitcoins doesn't matter, unless you have bought them for real money, then you don't pay tax of the same value in Kroner or Dollars when you cash them out.
2. All other Bitcoins you have earned, mined or traded yourself or been given as a gift or won on a gambling site are taxable!
3. You can deduct the costs you have had with getting the Bitcoins, like a business deducts it's costs from their sales before they pay tax on their profit. But it is first when Bitcoin becomes real money you have in you hand or in your bank account that you have any "real" money or profits in the eyes of the law which you then need to account for. Before they are cashed out, Bitcoin is not money!!
4. By Dansih law, any income you have extra besides your day job, is filed as "B income" and is taxed a flat 49% if they are earned outside Denmark (no personal deductions possible). That can apply if you trade on an exchange, there are no danish ones, if you sell something as a business to a foreigner for Bitcoins.
5. You say you are employed in a company in Denmark and pay danish tax. However as a US citizen you can still be an "independent contractor" doing private business abroad in Denmark and if you earn less than $6000 a year, you don't have to file anything to the IRS or pay taxes of your earnings.
How Danish tax authorities consider foreigners working independently, Greencard wise etc. I don't know!
So if you cashed out Bitcoins last year to your real life bank account in Denmark and you still have profits after deducting your costs, you file the amount on the 2012 tax return under "B income". Mr. tax then sends you a claim for 49% of the amount in Danish Kroners.
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As a side note: If Bitcoins were considered as having any value or as being money under Danish law, you would pay 10% tax yearly on your holdings on an exchange in another country and pay 39% of your earnings if they come from investing or trading.
So paying 49% voluntary, sends a signal of good faith in applying to the current law, if the Danes at some point decides that Bitcoin is a target for taxation, having avoided paying tax on your profits, because there are no laws on Bitcoin will land you a fine. They look at least 5 years in the past so it can be extremely expensive to be over confident.
