Denmark to Tax Cryptocurrency Gains at 42% from 2026 Onward  

• Denmark introduces a 42% tax on unrealized gains for crypto starting 2026.  
• Tax applies to all crypto assets acquired since Bitcoin’s launch in 2009.  
• New regulations aim to enhance transparency and curb tax evasion.  

Denmark has announced its plan to implement a tax on unrealized gains from cryptocurrencies starting January 1, 2026. This tax will impose a 42% rate on the gains of all crypto assets, including Bitcoin, acquired since its inception in 2009. 

The Tax Law Council has recommended that this new tax apply to both future acquisitions and existing crypto holdings. As a result, anyone who has invested in cryptocurrencies will be subject to this tax rate on unrealized gains, regardless of whether they choose to sell their assets. 

Tax Minister Rasmus Stoklund expressed his support for the proposed changes, emphasizing the need for a fairer taxation system for crypto investors.

In response, the Danish government plans to introduce additional regulatory measures to ensure compliance. In 2027, Denmark will exchange data on its crypto investors internationally, further enhancing transparency and accountability.

Moreover, the government intends to require crypto service providers to report customer transactions starting in early 2025. This initiative will help regulate approximately 300,000 Danish citizens currently owning cryptocurrencies and combat potential tax evasion. 

Additionally, the proposed tax framework will allow investors to offset losses from one cryptocurrency against gains from another, along with gains on traditional financial contracts. This approach seeks to rectify the taxation asymmetry, which is disproportionately affecting investors.

The announcement coincides with similar initiatives in other European countries, particularly Italy, which recently raised its capital gains tax on cryptocurrencies from 26% to 42%. This alignment reflects a broader trend among European nations to tighten regulations on digital assets while increasing government revenue through taxation.