The online privacy of crypto traders in Denmark will not be the same after the latest announcements, made on Monday, January 13th. As it turns out, the Danish Tax Agency has received authorization to collect users’ data from cryptocurrency exchanges in the country, with the objective of checking if traders are paying what they owe.
The agency is known as ‘Skattestyrelsen’ in Danish. The development marks the very first time in which Denmark’s Tax Council has given such permission to an agency. The Skattestyrelsen will be able to gain access to traders’ data, including their names, exact addresses, Central Person Registration (CPR) numbers, and performed trades.
Handing Over Data
As a result of the decision, three Danish crypto exchanges will have to provide data logs for the 2016-2018 period. The platforms’ names were not provided at the time of writing this piece.
The Skattestyrelsen stated in its application that its primary objective was to “obtain information on unexecuted taxpayers’ and companies’ virtual currency transactions,” all with the intention of ensuring fair tax policies and their fulfillment.
The Skattestyrelsen claims to have received sensible information from Finnish tax authorities, involving Danish traders’ behavior on a Finland-based cryptocurrency exchanged that was not identified. As a result, Denmark’s Tax Council granted permission to gather users’ data in these environments.
“Without going too far, I think you can say that this is a big market that we need to look into.” Those were the words of the Personal Tax Director at the Skattestyrelsen, Karin Bergen. With crypto exchanges growing daily, both in trading volume and users, establishing tax policies and collecting information and contributions is becoming increasingly difficult in specific locations.
Judging by the Numbers
The Skattestyrelsen published some raw numbers about the Danish people’s activity in its platform. The statement was issued on December, and among its conclusion were that about 2,700 Danish citizens performed crypto trades that amounted to more than 100 million Danish krone, or a little over $15.35 million on the mentioned Finnish exchange in the 2015-2017 period.
According to Bergen’s words in December, that is probably “just the tip of the iceberg.” He also stated back then that “although it is a relatively small bitcoin exchange, the information is a very valuable source that clearly shows trends and patterns in the field.”
Unawareness is a Notorious Problem
The Skattestyrelsen used a study held by the National Tax Board in December to determine that about 450,000 Danish citizens have toyed with the idea of venturing in the crypto trading world, but only half of that total is aware of the tax regulations in the European nation. While traders need to pay their taxes on any profits, the losses ought to be claimed for the tax deduction.
The Danish Tax Agency is an organization under the country’s Ministry of Taxation, working together with other agencies of the Ministry.
The Ministry of Taxation manages nine specialized agencies, each responsible for their own core tasks. The agencies have offices spread over 26 locations in the nordic nation.
By Andres Chavez
