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Crypto Tax Crackdown: Denmark, Bulgaria Begin Purges

Crypto Tax Crackdown: Denmark, Bulgaria Begin Purges 101
Source: iStock/MCCAIG

European nations’ tax authorities are targeting cryptocurrency traders, investors and vendors – with wide-ranging sweeps in Denmark and Bulgaria.

Denmark’s national tax agency has announced it has been granted access to the historical data of three unnamed domestic exchanges in the period 2016-2018, suspecting that a large number of investors may owe unpaid taxes on their earnings.

Late last year, the agency said that, per a tax board survey, only 50% of Danish citizens who have expressed an interest in cryptocurrencies are aware that Danish law requires them to pay tax on their earnings.

According to an official statement from the agency, the three exchanges must now hand over details of all token purchases and sales made over the period, making full disclosure of customers’ names, addresses, ID numbers and – in the case of companies – business registration numbers. The agency also says foreign nationals trading at the exchanges are not exempt – it will also disclose information on transactions made by overseas nationals and companies to the relevant countries' tax authorities.

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The agency says its move was sparked by reports from Finland of Danish citizens trading on a Finnish exchange. It claimed the tip-off helped it expose “a larger picture, which we now have the opportunity to uncover more of.”
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Weekly LocalBitcoins, a peer-to-peer bitcoin marketplace, volume (in bitcoin) in Denmark:

Crypto Tax Crackdown: Denmark, Bulgaria Begin Purges 102
Source: coin.dance

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Meanwhile, in Bulgaria, the National Revenue Agency says it has begun a spate of inspections on companies that trade cryptocurrencies, “to establish whether companies and their clients comply” with tax laws, per media outlet Novinite. The same media outlet states that nine companies have already been asked to submit data, which will be examined by the agency to determine if any tax is outstanding.

Under Bulgarian law, cryptocurrency-related earnings must be declared annually – with FY2018’s deadline falling on April 30. Individuals in the country are taxed at a flat rate of 10%, while companies may also need to pay Corporate Income Tax on their crypto-earnings.

The National Revenue Agency stated that it is concerned that the “anonymous” nature of cryptocurrency trading could drive up the “risk of revenue concealment and non-payment of taxes.”

Meanwhile, as reported by Cryptonews.com, local observers say Poland’s crypto industry is looking cautiously to the new regulations which will require cryptocurrency traders to declare their revenues from the sale of cryptocurrencies in 2019 and subject them to a tax rate of 19%.

At the same, in the U.S, major cryptocurrency market player and member of a U.S. based crypto industry lobbying group, Circle is working with regulators in order to change the current painful tax treatment for crypto-to-crypto transactions.

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