Denmark to Introduce 42% Tax on Unrealized Crypto Gains by 2026

• Denmark will impose a 42% tax on unrealized cryptocurrency gains starting January 2026.
• The new tax policy will apply to crypto gains from as far back as Bitcoin’s 2009 inception.
• Crypto exchanges must report transactions as Denmark tightens regulations to prevent tax evasion.

Denmark plans to implement a new tax policy targeting unrealized capital gains from cryptocurrencies. Beginning on January 1, 2026, a tax rate of 42% will be enforced on unrealized profits from investments like Bitcoin in the nation.

The goal is to incorporate digital currencies into Denmark’s current financial tax system, treating them similarly to traditional investments such as stocks and bonds.

Crypto Tax Law Reform in Denmark

The government of Denmark has suggested a plan to tax unrealized cryptocurrency profits. It will backdate it starting from when Bitcoin was created in 2009. Even if investors retain their cryptocurrency investments, they will still be required to pay taxes according to the value of their assets.

As per the Tax Law Council, this rule applies to any digital assets not tied to physical assets or fiat currencies. The proposed 42% tax will align crypto with other types of investment taxation.

The regulation will also mandate that crypto service providers, like exchanges, disclose customer transactions. This information will be exchanged among European Union nations to guarantee adherence and openness.

This proposal aims to tackle issues caused by the decentralized structure of cryptocurrencies, making it challenging for authorities to enforce uniform taxation historically.

Challenges for Investors and Regulatory Measures

Governments face significant challenges in regulating cryptocurrencies due to their decentralized structure. As Denmark undergoes regulatory changes, additional steps will be implemented by the government to combat tax evasion.

Denmark will commence sharing cryptocurrency investor information globally starting in the year 2027. The authorities aim to tax approximately 300,000 Danish crypto holders effectively.

Additionally, the new law will allow investors to offset losses from one cryptocurrency against gains in another. This measure corrects current asymmetries in the system, which heavily tax investors on gains without providing equivalent offsets for losses.

Global Crypto Taxation Trends

Denmark’s initiative coincides with international moves toward tighter crypto regulation. Italy, for example, recently raised its capital gains tax on cryptocurrencies to 42%. Similarly, the U.S. is exploring the possibility of taxing unsold crypto assets.

Denmark’s upcoming policy is likely to impact a large number of crypto investors, making it essential for them to stay informed about these developments.