Denmark consider taxing unrealized gain on bitcoin. - page 3.

Smartvirus

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Quote from: Sanitough on October 25, 2024, 04:57:32 AM

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.

Volatility is always going to pose some challenge towards taxing of Bitcoin. Models that would allow for income tax which would be based on increased allocation and time of sales would be a preferable option.
This would only lead to more and more tax evading and they aren't looking for a means to help Bitcoin development eventually, they hope to discourage it with unfair taxation.

stompix

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Blackjack.fun

Quote from: davis196 on October 25, 2024, 06:50:24 AM

I'm 100% sure that everyone in Denmark is going to declare his crypto holdings to the authorities. There's no doubt about that. Grin

They will, Denmark has the highest tax revenue to GDP rates in the EU and the highest in the world, it's always funny to see people not realizing the difference in willingness to pay taxes when you know how those are used and how the government actually takes care of you, of course for someone living it a 3rd world country this take would be hilarious as there all the money gets lost or stolen but here in the north it's actually put to good use.

For example, people are happy to pay 25% tax on a new car for the first 10000 euros and 80% for the rest of the value and Denmark still has 10 times more cars per capita than Nigeria or India Wink

Quote from: Ultegra134 on October 25, 2024, 06:33:39 AM

That's true; it does; I didn't comprehend what it meant at first, but to me it seems it's overcomplicating things, as the nature of a large number of investments, including cryptocurrencies, is highly volatile. What's the point then? From my understanding, it's what you mentioned already; it's an intrusive process to keep track of each investor's holdings, closely monitoring them every year, ensuring that they have the full history of your investment portfolio when they're sold.

Quite the opposite!
You have the whole document here:
https://skm.dk/ministeriet/om-skatteministeriet/publikationer-fra-skattelovraadet/rapport-om-finansielle-kryptoaktiver

Quote

The Tax Council has considered three different taxation principles; a traditional realization principle, a net profit principle and an inventory principle. Overall, the challenges of a realization principle are that the calculation can be complex and difficult when there is a lot of trading. On the other hand, the calculation according to a storage principle is simpler, and it does not require that information about the trades be stored long after the acquisition. Particularly for the stock principle, however, it applies that a liquidity burden may arise when assets have not necessarily been realized to pay the tax with.

The Tax Council recommends that financial crypto-assets in future be covered by the same set of rules that
currently apply to financial contracts that are taxed on stock according to the rules in Chapter 6 of the Capital Gains Act

MeGold666

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I had been warning about this for a long time. Why? Because if they can, they will.

They can't tax what they can't see. That's why Monero. Cheesy

If my country goes rogue, I'll just move to Monaco for a while or somewhere else without crooks.

It's good to be in power. With Bitcoin, however, it's like walking around with your pants down, hoping no one takes advantage.

I don't put my money in a hope box, I need security.

davis196

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Quote from: Sanitough on October 25, 2024, 04:57:32 AM

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... Cry

Quote from: https://cointelegraph.com/news/denmark-propose-bill-to-tax-unrealised-crypto-gains

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

I'm 100% sure that everyone in Denmark is going to declare his crypto holdings to the authorities. There's no doubt about that. Grin

Maybe the authorities in Denmark are considering the ownership of Bitcoin/crypto to be pretty much the same as owning a house. You will have to pay taxes over the property, even if you don't get any income or dividends from that particular asset(assuming that a house/apartment can be called an asset). The Scandinavian tax systems are weird and I don't want to get familiar with them. I don't live in a Scandinavian country and I don't have any plans moving there.

Ziskinberg

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Quote from: NotATether on October 25, 2024, 06:35:51 AM

So if you buy a shitcoin and it suddenly dumps by 90%, you can actually get money back on that.

"Money back" isn’t quite accurate here since, with taxes, there’s no literal refund once you’ve paid it. Instead, they offset your tax liability with any negative balance during your annual filing, especially if your assets dump a lot. It’s more like adjusting your future taxes rather than actually giving money back.

FortuneFollower

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Quote from: pooya87 on October 25, 2024, 06:38:03 AM

I've always found tax laws in the west to be very draconian. Although it makes sense because their governments' budgets heavily relies on these taxes and the more budget deficit they face and the more economic crisis they face the more they need to increase their income hence the increasing taxation.

Considering that the alternative is to print money and that would cause hardship for everyone and tank the economy, I'd say the "draconian taxation" is the lesser of two evils.

But that's still an evil for Hodlers especially Grin

Only time will tell whether it really will be implemented and how it will work out in practice, if it ever will, that is.

pooya87

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I've always found tax laws in the west to be very draconian. Although it makes sense because their governments' budgets heavily relies on these taxes and the more budget deficit they face and the more economic crisis they face the more they need to increase their income hence the increasing taxation.

Considering that the alternative is to print money and that would cause hardship for everyone and tank the economy, I'd say the "draconian taxation" is the lesser of two evils.

NotATether

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Guys who didn't read the article:

They will also issue credits on unrealized losses, too.

So if you buy a shitcoin and it suddenly dumps by 90%, you can actually get money back on that.

It's a stupid idea though that's going to hurt HODLers and help crypto traders. Unless (as someone on r/cryptocurrency wrote) they abuse the system by only reporting the losses and not the gains, or a bear market comes by and everybody loses $$$, in which case it will be forced to close shop quickly.

betswift

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Quote from: AVE5 on October 25, 2024, 06:28:03 AM

Government oppressions everywhere. So are the Denmark government going to issue insurance Incase of holders lost such as scammed victims? Let's just assume lost on profit is constant due to market fluctuations.

Don't see it happening.. Grin

Ultegra134

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Quote from: freedomgo on October 25, 2024, 06:19:52 AM

From what I get, the article explains that if you incur losses, your tax liability goes negative, letting you carry that forward to offset future tax liability. So if you owe $5000 the next year, you can reduce it by last year’s losses. Honestly, this setup feels intrusive; it pushes citizens to disclose their holdings, which raises big privacy concerns. Reporting your assets could expose you to risks if that info ever leaks, as it shows just how much you hold. I’m not in favor of this proposal, even if it won’t affect me directly since I’m not in that country. Here’s hoping it doesn’t go through.

That's true; it does; I didn't comprehend what it meant at first, but to me it seems it's overcomplicating things, as the nature of a large number of investments, including cryptocurrencies, is highly volatile. What's the point then? From my understanding, it's what you mentioned already; it's an intrusive process to keep track of each investor's holdings, closely monitoring them every year, ensuring that they have the full history of your investment portfolio when they're sold. I'm hoping it doesn't go through, because even though it's in Denmark, more countries may follow if it's ultimately accepted.

AVE5

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Government oppressions everywhere. So are the Denmark government going to issue insurance Incase of holders lost such as scammed victims? Let's just assume lost on profit is constant due to market fluctuations.

tranthidung

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Farewell o_e_l_e_o

Quote from: Sanitough on October 25, 2024, 04:57:32 AM

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.

They are taxing citizens to death because taxing unrealized gain (profit) is insane. 1 bitcoin is always 1 bitcoin but its value and price change with time, in every market cycle and more seriously in black swan events.

Governments are trying to do the easiest part, taxing first on Unrealized profit, but then even they allow you to claim tax rebate if you eventually sell at loss, I believe that it won't be an easy procedure to claim your Tax Rebate, if there is any tax policy like this.

Taxing citizens to death will push their citizens moving to other countries which are tax heaven like Saudi Arabia.

15 crypto tax-free countries in 2024. You have to double check information in that article, I am not sure about information accuracy.

freedomgo

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Playbet.io - Crypto Casino and Sportsbook

Quote from: Ultegra134 on October 25, 2024, 06:07:19 AM

That doesn't necessarily mean that their recommendation is realistic or sensible. I understand the point you're trying to make, but this doesn't change the fact that this is an unreasonable recommendation. It makes no sense to report unrealized cryptocurrency gains; for instance, what if I report $20,000 in gains because Bitcoin is booming but next year has crashed, resulting in a $5,000 loss? I would already be taxed for the $20,000 I didn't sell and were never actually in my hands in fiat currency, but now that I'm at a loss, will I receive the tax amount I paid last year? Probably not; this scheme has many loopholes, but it still remains a recommendation; it hasn't been approved yet, and even if it is, I'm confident that this is subject to change.

From what I get, the article explains that if you incur losses, your tax liability goes negative, letting you carry that forward to offset future tax liability. So if you owe $5000 the next year, you can reduce it by last year’s losses. Honestly, this setup feels intrusive; it pushes citizens to disclose their holdings, which raises big privacy concerns. Reporting your assets could expose you to risks if that info ever leaks, as it shows just how much you hold. I’m not in favor of this proposal, even if it won’t affect me directly since I’m not in that country. Here’s hoping it doesn’t go through.

Kevystia

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I really think taxing unrealized gains is a terrible idea for investors. It’s frustrating to think we’d have to pay taxes on profits we haven’t even cashed in on yet, especially in a market as unpredictable as crypto. It could put people in a tough spot, forcing them to sell their investments just to cover tax bills on gains that could disappear in an instant.
On top of that, it complicates everything when it comes to filing taxes. We’d have to keep a close eye on the value of our assets all year round, and that’s just asking for mistakes. If this kind of policy actually gets pushed through, I can see a lot of people looking to invest in places where the tax situation is friendlier, which would be a shame for innovation here. It just makes so much more sense to tax only the gains we actually realize when we sell.

Ultegra134

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Quote from: stompix on October 25, 2024, 05:37:47 AM

Yeah indeed, so how about we do something like this:
- everyone who hates the Western world stays in their shithole country and stops coming in millions here
- every European that hates this goes to the shitty countries that they fancy
- as per above other countries manage to get as liveable and as appreciated as Denmark, good luck with this

Denmark is the No. 1 country for quality of life
Stupid government, right, what do they know about running a country, they should read posts on Bitcointalk for advice!

And again we have a shitty article about someone who translated the proposal with google translate and never bother to read the essential stuff, that all the tax models will be calculated IF the taxpayer does not disclose his income and doesn't fill his tax statements with his crypto holdings.

Can't wait till they realize how stupid they are and have failed for another hoax, remember this scaremongering:
No, Denmark did not propose banning self-custody wallets

That doesn't necessarily mean that their recommendation is realistic or sensible. I understand the point you're trying to make, but this doesn't change the fact that this is an unreasonable recommendation. It makes no sense to report unrealized cryptocurrency gains; for instance, what if I report $20,000 in gains because Bitcoin is booming but next year has crashed, resulting in a $5,000 loss? I would already be taxed for the $20,000 I didn't sell and were never actually in my hands in fiat currency, but now that I'm at a loss, will I receive the tax amount I paid last year? Probably not; this scheme has many loopholes, but it still remains a recommendation; it hasn't been approved yet, and even if it is, I'm confident that this is subject to change.

stompix

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Blackjack.fun

Quote from: headingnorth on October 25, 2024, 05:04:36 AM

Just goes to show how western governments are run by complete morons.

Yeah indeed, so how about we do something like this:
- everyone who hates the Western world stays in their shithole country and stops coming in millions here
- every European that hates this goes to the shitty countries that they fancy
- as per above other countries manage to get as liveable and as appreciated as Denmark, good luck with this

Denmark is the No. 1 country for quality of life
Stupid government, right, what do they know about running a country, they should read posts on Bitcointalk for advice!

And again we have a shitty article about someone who translated the proposal with google translate and never bother to read the essential stuff, that all the tax models will be calculated IF the taxpayer does not disclose his income and doesn't fill his tax statements with his crypto holdings.

Can't wait till they realize how stupid they are and have failed for another hoax, remember this scaremongering:
No, Denmark did not propose banning self-custody wallets

betswift

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Quote from: Sanitough on October 25, 2024, 04:57:32 AM

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... Cry

Quote from: https://cointelegraph.com/news/denmark-propose-bill-to-tax-unrealised-crypto-gains

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

So, what if exchanges wouldn't comply with the tax?
They would be banned?
At least that's all on paper for now.. Grin

headingnorth

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NO SHITCOIN INSIDE

Just goes to show how western governments are run by complete morons.

Sanitough

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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... Cry

Quote from: https://cointelegraph.com/news/denmark-propose-bill-to-tax-unrealised-crypto-gains

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

Topic: Denmark consider taxing unrealized gain on bitcoin. - page 3. (Read 575 times)