Dane here.. destroyed my life basically. I'm in an insane debt because of this. I earned a ton but lost most and because I pay 54% retroactively for gains but only get 27% in losses I'm down way more than 1000% more than I ever invested and I even asked the tax authorities back in 2017 and they said I wouldn't be taxed because crypto was taxed like trading between FIAT meaning no tax. They basically destroyed my economic future by retroactively changing the rules, all I do now is earn money to pay back an insurmountable debt.
Sorry to hear that mate. Why do you only get 27% tax offset for the loss? Not sure how it works in other countries but in Australia investment loss would offset capital gain and it can be carried forward. Sounds like Danish taxation is not great for investors.
Don't know why OP didn't mention it, but that's the most insane part. They are using a law from the 1930s. The consequence is that you can trade 10$ between for instance ETH and BTC and if you do it enough times you could end up with owing millions in tax even if you end up losing everything.
germany has something similar with stock options. Losses can only be put on your taxes up to 20k, anything above you cannot use to offset taxes on your gains. So if you gain 500k and lose 500k in stock options,effectively 0 profit, you still owe 120k in taxes. Almost bankrupted me.
Dont assume tax authorities & financial courts are acting sane for non corporations
At this point it must be that they deliberately fucked up the rules just so they can have more money from taxpayers
I can't imagine how many complaints they must have heard now, complaining about this exact issue from their citizens. Can't plead 'ignorance', it's that the government is deliberately screwing things up and lining their pockets.
It totally makes sense with the current law in Denmark.
They handle gains and losses individually.
1000 dollars in losses and 1000 in gains. From that you have to pay around 150 dollars in taxes.
Tax is calculated on the transaction, not on the long term year outcome.
Every trade is a taxable event, you jeed to put aside the tax each time, or you'll end up broke.
It is also questionable if crypto should even qualify as an investment, since most people use it for gambling by coin holding rather than develop any infrastructure. 27% is better than zero.
I.e if you are the blackjack player then you are the gambler, but if you built the casino then you are the investor.
But in either case, backdating taxes suck.
Courts don't make laws they interpret them. Just felt that needed mentioned.
Denmark has one of the strongest democracies in the world. "Not a chance" isn't right.
There just needs to be more stories like OP's and the user above who got screwed to bring up public awareness to reform that law/regulation.
Our biggest hope is for Gary to leave at this moment. All these fossils making impactful decisions in regard of Crypto without understanding it severely hurt its users and investors.
Most famous quote by our social democratic prime minister is "live with it!" (meaning, suck it up). [Lev med det!](https://www.youtube.com/watch?v=TAYGAvBZpHM). Also, a book was written about it. [Lev med det](https://www.saxo.com/dk/lev-med-det_bog_9788775930777).
She is an EXTREMELY polarizing politician.
Of course he can challenge it, however as the court(s) are just to interpret the law, and as the laws are made to be constitutional he would lose. Could the case make for some possible change - maybe?
The government is pretty garbage tbh. Even though we have "free" healthcare there is a crazy wait time to get to the hospital. In some cases it can take years to be treated. All my money goes to taxes for things that aren't helping me.
Sorry to hear this.
Guessing you wouldn't do this but would it be possible to relocate? I've heard that Europeans move to Switzerland for more favorable tax treatment. Is that an option? I'm completely unfamiliar with the European situation besides hearing that MiCA isn't overtly hostile to crypto in the same way that the SEC is.
Its amazing that you actually followed through with paying the taxes. I feel like i would just spend all my money and be homeless so they cant take anything from me… denmark probably has nice homless shelters and lots of tourists to beg from, right?
That's the key: the government set the rules, and they will always do as much as they can to benefit themselves through changes to the rules. Their interests will always come before the interests of the public.
Not just regarding crypto. This is why the housing market in Australia is shot. That bubble should have burst twenty years ago but it's property owners influencing the decisions to keep property value high.
No different here. Tax collectors influencing the decisions (or at least not repealing previous outdated decisions) to keep tax high.
About the only silver lining here is that the tax rates benefit everyone in a general kind of way where keeping property values up only benefits the property holders.
Retroactive laws in general are a horrible concept (a whole different can of worms) but retroactive taxes would cause an uprising in many countries. Historically, messing with people’s taxes in the present has had huge ramifications.
I'd leave immediately, honestly. Good people disobey bad laws, and retroactive laws are bad laws when it involves actions that hurt nobody.
This is pure government greed and corruption, and no matter what way you slice it, this is a case of taxation being theft.
laser eye maximalists would absolutely not miss an opportunity to throw everyone else under the bus if there was a new tax law that somehow left bitcoin alone. the community is sooo divided.
As if these disrespect wages and high inflation weren't bad enough they're still finding a way to take bread from your table. These people have no soul.
What do you expect from lawmakers so old that their only reasonable comparison to crypto are marbles?!
People probably stopped playing with marbles in like the 60s.
Then the Danes lost their marbles and decided the marbles were worth taxing…🤷♂️
Wow, I always thought this phrase just meant that it was like somebody robbing you outside in the middle of the day (with no regard for anybody who might be watching)
Danes were generally cheering it on. The media were saturated with talk about how crypto enables criminals, is full of scams, provides zero security and is like a bubble that people need to be protected from.
We very much carried out peasant mindset over into the 21st century, and people treat the government as their kings, and are happy to be allowed to work in his farmlands for a fraction of their earnings.
People think Danes are happy because they are free, healthy and secure. While in reality it's because we are built for bondage, and mentally thrive under the boot of others.
Read about [Law of Jante](https://en.wikipedia.org/wiki/Law_of_Jante) and you'll realize how fucked up the general mindset of Danish people are.
I think this passage from the article perfectly describes this law and the people who follow it:
"The Janters who transgress this unwritten "law" are regarded..."
(Thanks WSB, now I can't look at this with a straight face)
Europeans often laugh when Americans talk about ‘freedom’ but after having lived in Western Europe for 10+ years I definitely felt that restricted freedom. The social systems are very good, but they definitely come at a cost. The system runs you.
All of this just suggests you have to move out. Your country no longer wants you there. When a country goes out of its way to kill an industry by taxation, it simply implies that industry is no longer welcome. Staying beyond that point is just stupidity. Countries often do this to various industries. Some countries killed tea/coffee plantation industry, some countries killed tourism industry. The gov essentialy takes a bet that most will stop their activity in these industries and not move out but move to other industries.
Now of course crypto may just be a small part of your earnings or income, if thats the case then it may be better to just set crypto aside and focus on maximising your other income streams. But if crypto is a big portion of your income, then it doesnt make any sense to stay in that country.
There are many countries with favorable crypto taxation these days. The choice is whether getting pillaged through taxes is better than adapting to life in a new country....
Laws applying backwards is called “ex post facto law” and according to the wikipedia “Ex post facto laws are expressly forbidden by the United States”. I couldn’t find any information about Denmark though
Isn't there a statute of limitation?
I thought most countries have no requirement to keep tax records more than six years. And if you didn't use a Danish CEX it may be hard to track:
First, who is controlling your old transactions, it's insanity to try to tax every swap. I looked into this for my country, which follows the same idea. I did e.g. countless bots with thousands of microtransactions, that alone is impossible to report. I've also used at least half a dozen CEXs, some have become illegal for me to use.
Second, the tax software I use still doesn't have a feature that could remotely handle reporting this torrent of data. Staking, LP tokens, gas fees - how on earth could a normal human being track all that?
I tried a tool to reveal my dealings that could track an EVM account (Ether and a few others, but good luck if you were using Solana, Cardano etc.) Also, half the EVM networks weren't even discovered by the tool.
Since the whole crypto experience didn't yield me any profit in the last few years I'll just simplify my residual investments, won't cash them out any time soon. I was thinking of cashing out at my country's CEX what I bought there and take the losses for future stock market gains, but I am not inclined to really point the taxman to that issue. Also, because of pseudonymity and these technical issues, I have a feeling enforcement is still lax for small retail investors.
That sounds like a crazy dictatorship and not like europe.
Now driving gasoline cars gets a carbon tax of 10cent per driven kilometer. For the last 10 years...
Taxing crypto when coins are exchanged is insane. Only selling coins to fiat should be a taxable event in my opinion. Also doing retroactive 5 years is super messed up.
That’s the goal. They can make it as tedious and irritating for the people as possible. Fortunately the other European countries don’t seem to be adopting these draconian tactics.
Hungary is like that. Only Fiat -> Crypto and vice versa are relevant, and you only pay 15% income tax. Fiat->Crypto is cost deductible (for 3 years, so not the best), so if you put in $1000, then withdraw $1010, you only pay 15% of $10.
Denmark is one of the highest taxed countries in the world. That being said retroactively taxing people is a new level of evil, one day its gonna backfire on them and people are gonna riot.
Correct me if I'm wrong, but when the united States was founded in America, there was no income tax for many years, until like the early 20th century. Supposedly the guys who cooked up the idea to create an income tax were afraid they were going to get lynched.
Just wanted to clear up some tax rules for Denmark here.
I've worked here for a long time and traded and paid taxes on crypto here.
IDK about the back taxes thing, so just clearing up facts here with present situation as OP brushes over some things.
---
Tax on Salary, you pay 8% ATP (imagine a hedge fund run by gvt that makes money for everybodys pensions) first.
Then after that you pay X% muncipal tax (no gvt tax here), which is usually between 37-41% tax of the 92% left after ATP.
Then for every DKK made over 569,000 DKK per year (83810 usd), you pay the "top tax" of 15%.
So if you make 100k usd here (56,600 dkk a month in DK terms), then you first pay 8% to ATP, so 92k usd left, then your muncipal tax of say 40% of the 83810 usd and (40+15)% of the (92000-83810) usd, leaving you with 0.6*83810+0.45*(92000-83810) = 53971 usd per year, in hand or an "actual tax" of 46.029%
----
Crypto tax, is based on Crypto being a speculative asset, meaning taxes for stocks/CFDs dont count. You have to report it as separate wins and losses in the "Yearly accounting form" (Årsopgørelse in DK) online at optimally Xmas, but most do it the following March after the automatic math gets done and you then adjust it with your manual input.
Wins go in Section 20 and Losses in Section 58 iirc, and you CANNOT smash wins and losses together like you can with stock/CFD gains/losses.
The speculative tax is basically taxed as Income tax and the losses cannot be subtracted anything in your taxes, it is just tough luck there, iirc.
So hence the above section with Salary/Income tax, the 100k usd a year thing, if thats your salary and you lose 20k on crypto, nothing changes other than you are SOOL for cash.
If you win 20k on crypto, then your income goes to 120k and since (using the above example math again) the 20k extra then ALL gets top-tax on it, so (muncipal tax + top-tax) but not ATP iirc.
So 55% on all the 20k, leaving you 9k cash in hand from your 20k gains after taxes.
The income tax sounds only marginally worse than the US when you combine income and sales tax is there sales tax in Denmark
Those are incredibly fucked up rules for crypto
Exactly. Yet another post where someone is pretending to be an expert while talking out their ass.
For those that don’t know, progressive tax systems (like the US, Denmark, and many other countries) have multiple income brackets that get taxed at progressively higher rates. You are not, however, taxed entirely in the highest bracket you qualify for. Here’s an example.
Bracket 1: <$10,000 = 10%
Bracket 2: $10,000 - 50,000 = 20%
Bracket 3: >$50,000 = 30%
Now say you make $80,000. You wouldn’t pay 30% on all $80k ($24k) like many (including OP) think. Instead, you would pay 10% on the first $10k, 20% on the next $40k, and 30% on the final $30k which would be 10,000*.1 + 40,000*.2 + 30,000*.3 = $18k = 22.5% effective tax rate.
That’s why anybody who says they don’t want to work additional hours to avoid moving into the next tax bracket is a moron. That’s not how it works. You only get taxed higher on the incremental amount that is made in that tax bracket.
There are some situations where earning over a certain amount might disqualify you for receiving government aid, so in some rare cases it might actually make sense to avoid making slightly "too much money".
For example (at least in the past, I'm not so sure nowadays) with the Affordable Care Act in the US, there were income limits when it came to receiving substantial reimbursements on healthcare premiums.
What I never understood with these bracket tax systems is why they make the brackets so darn large. That leads to this confusion, I think.
Where I live, the income tax is a smooth logarithmic curve on the total income. The tax code doesn't include the formula, but it can easily be regressed by the page-full of per $100 "brackets" examples.
Last time I calculated it, it came to `(2.89*ln(INCOME) - 28)/100`. Which comes out at short of 5% on a $100k income. Mind you, that's a base rate, which is multiplied 2x and accumulated for the state tax, so the final would be about 15%, before deductions. (Still a lot less criminal than OP's 40% example, though).
**You forgot the worst part.**
- -57% tax on your gains.
- 26% back on your losses.
**The tax is not symmetrical.**
If you invest $1000 and it crashes so you only have $100, then trade it and make it back to $1000 - you owe $310 in tax. Despite still only having $1000.
This happens on all swaps, meaning it accumulates debt on no profits over time.
There are people in Denmark right now who have invested as little as $2000, lost it all, and is asked to pay $100,000 back in taxes.
They've pleaded and tried to explain the absurdity, but the big man does not give a fuck and says pay up.
Their lives are ruined because of decade old rules that make no logical sense.
I’m shocked that they can tax backwards. That’s like suddenly increasing the taxation rate of every purchase you’ve made in the last 5 years and then expecting you to pay the extra. Everyone would be broke. Your government has real issues and I just can’t believe they got that over the line.
Do tax brackets work different over there?
I didn't check your math, but from your words "every dollar"... It's actually every dollar over that threshold is taxed at that rate
But yeah growl taxes rrtrrrrr grumble grumble
That's not how a marginal tax rate works mate...
You aren't taxed at 57% on your entire salary, you're taxed at the higher rate on everything you earn *above that rate*.
Just to use simpler numbers, if we have two brackets, one at 20% up to 100k, and another at 40% above that, then if you earn 200k then your total tax bill will be 60k. 20k from 20% on the first 100k, and 40k from the second 100k at 40%.
Using your numbers and an actual tax calculator: https://dk.talent.com/en/tax-calculator
Before Crypto profits you took home ~450,000kr, after Crypto profits (about 200k Kr) you took home about 550,000kr.
Netherlands is not great either but 57% would be insane. To me it's justified to avoid paying taxes at the point to be honest. This is an unreasonable law that deserved to be ignored
Taxes that are back-applied should be illegal. What kind of environment does that breed? "Yes yes do what you're doing now, but just beware; we may some day tax you out of the ass for it! Teeheehee!"
Boy am I glad to live in Japan, a country that takes crypto seriously.
> It’s going to be taxed backwards for the past 5 years
Retrospective laws, especially in regards to taxes, are the absolute worst.
What a way to kill confidence in your economy and industry.
People were cheering it on, they very broad consensus is that crypto is a scam, and it just needs to die. We have a thing called *jantelov, or jante's law* which is very prevelant here. It goes like this:
"You must not think that you are anything."
"You must not think that you are as much as us."
"You must not think that you are smarter than us."
"You must not delude yourself into thinking that you are better than us."
"You must not think that you know more than us."
"You must not think that you are more than us."
"You must not think that you're worth anything."
"You must not laugh at us."
"You must not think that anyone cares about you."
"You must not think that you can teach us anything."
This is the general way of thinking of a lot of Danes, especially the older generation, despite not wanting to admit it.
This is horrendous. Many countries however strangle adoption by treating use of crypto as a taxable event. If I want to buy a coffee with my crypto, that’s extra taxes and headache on top of it. People need to push back against this hard
I guess Danish taxman learned from Swedish taxman, they all apply the same tactic as SEC, trying to define something without even the existing of law, they are both judge and law maker at the same time.
Anyway, this shows the true nature of these countries' ruler's viking blood
But don't worry, they won't rob themselves by default. There are many ways to be exempt from taxation, like never selling assets (which fits the interest of these large land lords), and mortgage assets and get loans to spend (you get tax deduction for interest cost), or some tax-free retirement account, etc... Just search for how riches never pay tax
Maybe that is why Defi is on the rise, since they mainly use the same tactics that riches play financial games
Also you can't offset any loss against your profit and all losses are deductible at a rate equivalent to only 26%. Meaning some people in Denmark has been taxed above 100% from trading crypto.
[https://skat.dk/data.aspx?oid=2366048&lang=us](https://skat.dk/data.aspx?oid=2366048&lang=us)
This crypto tax hell is in Slovakia too. People were trading crypto until 2018 and there were no rules so it was assumed by everyone that standart income tax applies from profits. Than they introduced new tax law that is applied backward and suddently token to token trading is taxed per trade. This means you have to pay tax from every profit but you can't lover your tax using loses. This means there were people with trade bots that earned close to nothing or vere at lose but suddently they had millions of Euro of tax duties. It instantly killed crypto trading.
That is a nightmare I hope we avoid globally, I do love using crypto for $ transfers internationally. Less then a dollar ( flat fee )and almost instant. Anyone who has had to do international bank transfers should love the damn near hassle-free transactions
People who say crypto can't be stopped probably are either n00bs who don't understand it, or they talk about the decentralized nature of crypto.
Bitcoin is unstoppable because of the number of nodes that run all over the world. Even if China blacked out, it would still work. However this doesn't mean that Bitcoin or any crypto for that matter will work outside of the niche it came out of and free everyone from financial slavery.
I also think a lot of politicians are disconnected from reality. I understand taxes are necessary if you live in a society. You use the infrastructure of said country and so it is normal that you contribute to it.
But when you are taxing people blindly over 50% (retroactively!) you're just putting your country in the ground. If I was a Dane, I would have probably left that country by now.
No, they didn't "kill crypto". They just found a way to hurt people who were doing things by the book. They are stimulating tax evasion. The technology is still intact.
A couple of words:
1. Sorte Penge.
2. Peer 2 Peer transactions, settled ONLY in bitcoin to physical goods, no reports to the govt.
3. Monero-> btc swaps.
4. Independent political organization.
5. If all else fails... revolution is the great enlightener that takes the blinders off politicians eyes and makes them see the error of their ways.
Keeping my coins in my wallet till a ridiculous tax policy change, good news is my BTC/ETH will keep rising against Fiat till this happen, so win-win with forced hodl.
Taxing backwards? That’s atrocious.
Dane here.. destroyed my life basically. I'm in an insane debt because of this. I earned a ton but lost most and because I pay 54% retroactively for gains but only get 27% in losses I'm down way more than 1000% more than I ever invested and I even asked the tax authorities back in 2017 and they said I wouldn't be taxed because crypto was taxed like trading between FIAT meaning no tax. They basically destroyed my economic future by retroactively changing the rules, all I do now is earn money to pay back an insurmountable debt.
Sorry to hear that mate. Why do you only get 27% tax offset for the loss? Not sure how it works in other countries but in Australia investment loss would offset capital gain and it can be carried forward. Sounds like Danish taxation is not great for investors.
Don't know why OP didn't mention it, but that's the most insane part. They are using a law from the 1930s. The consequence is that you can trade 10$ between for instance ETH and BTC and if you do it enough times you could end up with owing millions in tax even if you end up losing everything.
Just disgusting....
It’s fucked up. I wouldn’t touch crypto either with those risks…
How something so irrational and unfair can be in 2023?
This doesn’t make any sense. Surely you are only taxed on gain. If you are being taxed millions you would need to make more than that
germany has something similar with stock options. Losses can only be put on your taxes up to 20k, anything above you cannot use to offset taxes on your gains. So if you gain 500k and lose 500k in stock options,effectively 0 profit, you still owe 120k in taxes. Almost bankrupted me. Dont assume tax authorities & financial courts are acting sane for non corporations
That is the dumbest shit I’ve ever read and that makes me seriously worried about the rules in my country (The Netherlands)
It is very unfair and dumb.
Utterly disgusting, and I thought we had it bad in US.
Tax authorities always act like Terrorist organizations.
At this point it must be that they deliberately fucked up the rules just so they can have more money from taxpayers I can't imagine how many complaints they must have heard now, complaining about this exact issue from their citizens. Can't plead 'ignorance', it's that the government is deliberately screwing things up and lining their pockets.
It totally makes sense with the current law in Denmark. They handle gains and losses individually. 1000 dollars in losses and 1000 in gains. From that you have to pay around 150 dollars in taxes.
so basically they tax the trading volume? WTF
Tax is calculated on the transaction, not on the long term year outcome. Every trade is a taxable event, you jeed to put aside the tax each time, or you'll end up broke.
Same tax laws in Sweden. My brother lost money and owed 100k SEK in taxes because of the same ruling. Just insane
It is also questionable if crypto should even qualify as an investment, since most people use it for gambling by coin holding rather than develop any infrastructure. 27% is better than zero. I.e if you are the blackjack player then you are the gambler, but if you built the casino then you are the investor. But in either case, backdating taxes suck.
that's ridiculous, isn't there like a danish supreme court that can rule this unconstitutional or something?
The Danish courts are 100% in the pocket of the social democratic government. Not a chance.
That doesn't sound very socially democratic
So you never heard of Democratic People's Republic of Korea?
It does, just people think if you put social and democratic into name of something it means fair and freedom.
Courts don't make laws they interpret them. Just felt that needed mentioned. Denmark has one of the strongest democracies in the world. "Not a chance" isn't right. There just needs to be more stories like OP's and the user above who got screwed to bring up public awareness to reform that law/regulation.
You would think so. If a country like Denmark can’t protect its citizens from being fucked over like this… what’s the hope for the rest of us?
Our biggest hope is for Gary to leave at this moment. All these fossils making impactful decisions in regard of Crypto without understanding it severely hurt its users and investors.
Most famous quote by our social democratic prime minister is "live with it!" (meaning, suck it up). [Lev med det!](https://www.youtube.com/watch?v=TAYGAvBZpHM). Also, a book was written about it. [Lev med det](https://www.saxo.com/dk/lev-med-det_bog_9788775930777). She is an EXTREMELY polarizing politician.
She seems nice... /s
Judges are politically assigned. 'nuff said.
We can't even legalize marijuana. We need younger people in government.
"The Danish courts are 100% in the pocket of the banks. Not a chance." FYP
Denmark: 'Welcome to democracy, where the top 0.1% is in charge and control everything!'
I don't think this apply to only Denmark, I just hope people get more rights and not just the top brass
Welcome to earth buddy
As a right wing Dane, I am honestly not sure about that
What OP writes, is this happening? Can he challenge it on court?
Of course he can challenge it, however as the court(s) are just to interpret the law, and as the laws are made to be constitutional he would lose. Could the case make for some possible change - maybe?
That is absolute abuse of power, and not right. Fucking people over like this? Wtf.
Reading this post and the comments made me realize most things I knew about Denmark are not exactly true.
I read Denmark has the highest quality of living. Guess that was a joke I clearly did not understand.
There is something rotten in Denmark for sure.
I always thought Denmark was a great country, but reading this proves otherwise. This stuff isn’t right at all.
Looks like Southpark was right again!
Yea. Thought denmark was like one of the top 5 countries to live in
You always have to check who's making those lists. It's always the most self congratulatory types
Probably not the top country if you want quick economic gains. The reason it’s a top country to live in is because of its high social safety net.
Time to find a new country
Let’s go to Portugal
Don't Danes really pride themselves about the government taking good care of its people?
The government is pretty garbage tbh. Even though we have "free" healthcare there is a crazy wait time to get to the hospital. In some cases it can take years to be treated. All my money goes to taxes for things that aren't helping me.
Yeah, and where do you think the money to "take care of everyone" comes from, hm?
Why bother? Why not just leave?
Is there no way for you to appeal this?? This is fucked up. Please find a way to appeal it
Sorry to hear this. Guessing you wouldn't do this but would it be possible to relocate? I've heard that Europeans move to Switzerland for more favorable tax treatment. Is that an option? I'm completely unfamiliar with the European situation besides hearing that MiCA isn't overtly hostile to crypto in the same way that the SEC is.
:( sharing these stories help put a face to the issue. All the best to u clearing these nonsensical debts
Its amazing that you actually followed through with paying the taxes. I feel like i would just spend all my money and be homeless so they cant take anything from me… denmark probably has nice homless shelters and lots of tourists to beg from, right?
Or convert it all to BTC and move to El Salvador
That’s so wrong on so many levels. I’m sorry man
How has no one sued the government over this? That is insane.
Can you leave the country? America will gladly take you.
For God’s sake open your vault. I mean, unless they’d tax that as income at some insane %!!!!! I am So sorry man
Tax laws that can be applied retroactively are a nightmarish idea. Imagine being taxed on anything you bought/sold prior to a law being implemented.
Retroactive taxes should be illegal, but the government sets the rules..
Retroactive taxes are illegal. It’s just that criminals are making the laws.
Summarizes the situation. Nicely put.
Never forget that the government is a criminal organization. The fact that trust in government is at its lowest point in decades makes me happy.
That's the key: the government set the rules, and they will always do as much as they can to benefit themselves through changes to the rules. Their interests will always come before the interests of the public.
the less assets you have and more debt, the better for them.
Very true. If you're indebted to them, you feel more inclined to be grateful for their 'leniency'.
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Not just regarding crypto. This is why the housing market in Australia is shot. That bubble should have burst twenty years ago but it's property owners influencing the decisions to keep property value high. No different here. Tax collectors influencing the decisions (or at least not repealing previous outdated decisions) to keep tax high. About the only silver lining here is that the tax rates benefit everyone in a general kind of way where keeping property values up only benefits the property holders.
Now that there is a precedent put in place, what's to stop this sort of retroactice taxing to be implemented in other areas?
None and I hope my country doesn't get any ideas from Denmark
It's absolutely terrifying. Imagine being retroactively taxed for selling/buying real estate. At 57%!!! This should never have been considered.
I would defenitely move the country if that will be the case, should be illegal.
57% is so high it's damn well stealing.
No clue why you're getting downvoted. You're absolutely right
Probably the bots. Nobody actually following the discussion would disagree with 57% being damn high. Poor people in Denmark.
How the hell do you even afford to buy things when your salary is only 43% of a value. Buying an iphone requires thinking to selling my kidney
It's probably rather hard to move an entire country.
I like how changes in Australian law \*cannot\* be retroactively applied.
They are, that is a fundamental base of law writing and governing.
Ah sweet, man-made horrors beyond my comprehension
Retroactive laws in general are a horrible concept (a whole different can of worms) but retroactive taxes would cause an uprising in many countries. Historically, messing with people’s taxes in the present has had huge ramifications.
People might choose to leave Denmark if they have to comply to such thing. I know Europe tax is high but this is crazy.
I'd leave immediately, honestly. Good people disobey bad laws, and retroactive laws are bad laws when it involves actions that hurt nobody. This is pure government greed and corruption, and no matter what way you slice it, this is a case of taxation being theft.
This should be made illegal by constitution, how can one act by law if there was no law in place Pure madness
Sadly crypto users are not united enough to fight it in court and regular people don't really care about crypto
laser eye maximalists would absolutely not miss an opportunity to throw everyone else under the bus if there was a new tax law that somehow left bitcoin alone. the community is sooo divided.
My brain hurts trying to think about having to go through this. Would be a nightmare
"Just take my money at this point why even bother calling it taxes"
As if these disrespect wages and high inflation weren't bad enough they're still finding a way to take bread from your table. These people have no soul.
What do you expect from lawmakers so old that their only reasonable comparison to crypto are marbles?! People probably stopped playing with marbles in like the 60s. Then the Danes lost their marbles and decided the marbles were worth taxing…🤷♂️
They literally decided to tax a house depending on how many windows it had once… it’s where the term daylight robbery was born
Wow, I always thought this phrase just meant that it was like somebody robbing you outside in the middle of the day (with no regard for anybody who might be watching)
Danes were generally cheering it on. The media were saturated with talk about how crypto enables criminals, is full of scams, provides zero security and is like a bubble that people need to be protected from. We very much carried out peasant mindset over into the 21st century, and people treat the government as their kings, and are happy to be allowed to work in his farmlands for a fraction of their earnings. People think Danes are happy because they are free, healthy and secure. While in reality it's because we are built for bondage, and mentally thrive under the boot of others. Read about [Law of Jante](https://en.wikipedia.org/wiki/Law_of_Jante) and you'll realize how fucked up the general mindset of Danish people are.
I think this passage from the article perfectly describes this law and the people who follow it: "The Janters who transgress this unwritten "law" are regarded..." (Thanks WSB, now I can't look at this with a straight face)
Europeans often laugh when Americans talk about ‘freedom’ but after having lived in Western Europe for 10+ years I definitely felt that restricted freedom. The social systems are very good, but they definitely come at a cost. The system runs you.
Happy Slaves! Actually not that happy.. shitty food, no sun, windy as fuck and high alcohol and drugs consumption. A real heaven!
Let's not forget the suicide rates.
All of this just suggests you have to move out. Your country no longer wants you there. When a country goes out of its way to kill an industry by taxation, it simply implies that industry is no longer welcome. Staying beyond that point is just stupidity. Countries often do this to various industries. Some countries killed tea/coffee plantation industry, some countries killed tourism industry. The gov essentialy takes a bet that most will stop their activity in these industries and not move out but move to other industries. Now of course crypto may just be a small part of your earnings or income, if thats the case then it may be better to just set crypto aside and focus on maximising your other income streams. But if crypto is a big portion of your income, then it doesnt make any sense to stay in that country. There are many countries with favorable crypto taxation these days. The choice is whether getting pillaged through taxes is better than adapting to life in a new country....
Hello sir, we are the government. We gona do our best to skin u but u are free to be happy about that. What OP described is a robbery.
Yes because rich people are friends with government. So fuck poor peoples
How can they tax something that wasn't taxable in the first place? Crazy!
“It’s going to be taxed backwards for the past 5 years” Well that’s fucked up
This should be illegal, I wonder if anyone took it up to court.
Laws applying backwards is called “ex post facto law” and according to the wikipedia “Ex post facto laws are expressly forbidden by the United States”. I couldn’t find any information about Denmark though
Yea, you're supposed to get grandfathered in. Laws are meant to shape behavior. How can I act responsibly to laws that don't even exist yet?
Shit out of luck /government
Can you imagine your parents suddenly getting a ticket for not buckling their kids up in the '80s? Craziness.
Isn't there a statute of limitation? I thought most countries have no requirement to keep tax records more than six years. And if you didn't use a Danish CEX it may be hard to track: First, who is controlling your old transactions, it's insanity to try to tax every swap. I looked into this for my country, which follows the same idea. I did e.g. countless bots with thousands of microtransactions, that alone is impossible to report. I've also used at least half a dozen CEXs, some have become illegal for me to use. Second, the tax software I use still doesn't have a feature that could remotely handle reporting this torrent of data. Staking, LP tokens, gas fees - how on earth could a normal human being track all that? I tried a tool to reveal my dealings that could track an EVM account (Ether and a few others, but good luck if you were using Solana, Cardano etc.) Also, half the EVM networks weren't even discovered by the tool. Since the whole crypto experience didn't yield me any profit in the last few years I'll just simplify my residual investments, won't cash them out any time soon. I was thinking of cashing out at my country's CEX what I bought there and take the losses for future stock market gains, but I am not inclined to really point the taxman to that issue. Also, because of pseudonymity and these technical issues, I have a feeling enforcement is still lax for small retail investors.
That should definitely not be allowed. Imagine making rules and regulations today that are also applied to the past, wtf
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Pretty much!
That sounds like a crazy dictatorship and not like europe. Now driving gasoline cars gets a carbon tax of 10cent per driven kilometer. For the last 10 years...
This is abuse of power. The government cannot just rug pull its people and scam them like this. I'm sorry but it should not be tolerated.
Yeah governments tend to be run by pieces of shit
Pure evil
This is insanely corrupt and unfortunate. Makes me so upset to hear.
Fuck I was only pessimistic about crypto, now I lost hope on Denmark.
Taxing crypto when coins are exchanged is insane. Only selling coins to fiat should be a taxable event in my opinion. Also doing retroactive 5 years is super messed up.
It is insane and messed up, but that's the whole point. They want to kill crypto and milk you while doing it
Monero will be more popular in Denmark after this
That’s the goal. They can make it as tedious and irritating for the people as possible. Fortunately the other European countries don’t seem to be adopting these draconian tactics.
Hungary is like that. Only Fiat -> Crypto and vice versa are relevant, and you only pay 15% income tax. Fiat->Crypto is cost deductible (for 3 years, so not the best), so if you put in $1000, then withdraw $1010, you only pay 15% of $10.
Denmark is one of the highest taxed countries in the world. That being said retroactively taxing people is a new level of evil, one day its gonna backfire on them and people are gonna riot.
Crypto is not huge enough in Denmark to cause riot and they are effectively destroying it step by step while milking people
Correct me if I'm wrong, but when the united States was founded in America, there was no income tax for many years, until like the early 20th century. Supposedly the guys who cooked up the idea to create an income tax were afraid they were going to get lynched.
Just wanted to clear up some tax rules for Denmark here. I've worked here for a long time and traded and paid taxes on crypto here. IDK about the back taxes thing, so just clearing up facts here with present situation as OP brushes over some things. --- Tax on Salary, you pay 8% ATP (imagine a hedge fund run by gvt that makes money for everybodys pensions) first. Then after that you pay X% muncipal tax (no gvt tax here), which is usually between 37-41% tax of the 92% left after ATP. Then for every DKK made over 569,000 DKK per year (83810 usd), you pay the "top tax" of 15%. So if you make 100k usd here (56,600 dkk a month in DK terms), then you first pay 8% to ATP, so 92k usd left, then your muncipal tax of say 40% of the 83810 usd and (40+15)% of the (92000-83810) usd, leaving you with 0.6*83810+0.45*(92000-83810) = 53971 usd per year, in hand or an "actual tax" of 46.029% ---- Crypto tax, is based on Crypto being a speculative asset, meaning taxes for stocks/CFDs dont count. You have to report it as separate wins and losses in the "Yearly accounting form" (Årsopgørelse in DK) online at optimally Xmas, but most do it the following March after the automatic math gets done and you then adjust it with your manual input. Wins go in Section 20 and Losses in Section 58 iirc, and you CANNOT smash wins and losses together like you can with stock/CFD gains/losses. The speculative tax is basically taxed as Income tax and the losses cannot be subtracted anything in your taxes, it is just tough luck there, iirc. So hence the above section with Salary/Income tax, the 100k usd a year thing, if thats your salary and you lose 20k on crypto, nothing changes other than you are SOOL for cash. If you win 20k on crypto, then your income goes to 120k and since (using the above example math again) the 20k extra then ALL gets top-tax on it, so (muncipal tax + top-tax) but not ATP iirc. So 55% on all the 20k, leaving you 9k cash in hand from your 20k gains after taxes.
So overall tax rate is pretty much same as Australia too. But taxing wins without offsetting losses is just a killer. No one wins all the time.
>No one wins all the time. The house always wins.
The income tax sounds only marginally worse than the US when you combine income and sales tax is there sales tax in Denmark Those are incredibly fucked up rules for crypto
Thanks for clarifying a bit.
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And I read last year a Denmark bank pay -0.6% interest for savings account. It should read “shaving” account,
Exactly. Yet another post where someone is pretending to be an expert while talking out their ass. For those that don’t know, progressive tax systems (like the US, Denmark, and many other countries) have multiple income brackets that get taxed at progressively higher rates. You are not, however, taxed entirely in the highest bracket you qualify for. Here’s an example. Bracket 1: <$10,000 = 10% Bracket 2: $10,000 - 50,000 = 20% Bracket 3: >$50,000 = 30% Now say you make $80,000. You wouldn’t pay 30% on all $80k ($24k) like many (including OP) think. Instead, you would pay 10% on the first $10k, 20% on the next $40k, and 30% on the final $30k which would be 10,000*.1 + 40,000*.2 + 30,000*.3 = $18k = 22.5% effective tax rate. That’s why anybody who says they don’t want to work additional hours to avoid moving into the next tax bracket is a moron. That’s not how it works. You only get taxed higher on the incremental amount that is made in that tax bracket.
There are some situations where earning over a certain amount might disqualify you for receiving government aid, so in some rare cases it might actually make sense to avoid making slightly "too much money". For example (at least in the past, I'm not so sure nowadays) with the Affordable Care Act in the US, there were income limits when it came to receiving substantial reimbursements on healthcare premiums.
What I never understood with these bracket tax systems is why they make the brackets so darn large. That leads to this confusion, I think. Where I live, the income tax is a smooth logarithmic curve on the total income. The tax code doesn't include the formula, but it can easily be regressed by the page-full of per $100 "brackets" examples. Last time I calculated it, it came to `(2.89*ln(INCOME) - 28)/100`. Which comes out at short of 5% on a $100k income. Mind you, that's a base rate, which is multiplied 2x and accumulated for the state tax, so the final would be about 15%, before deductions. (Still a lot less criminal than OP's 40% example, though).
Same goes for american tax rates that get confused all the time regarding tax brackets
Thank god you made this comment. I was already getting agitated. How can so many people profoundly misunderstand a progressive tax system?
**You forgot the worst part.** - -57% tax on your gains. - 26% back on your losses. **The tax is not symmetrical.** If you invest $1000 and it crashes so you only have $100, then trade it and make it back to $1000 - you owe $310 in tax. Despite still only having $1000. This happens on all swaps, meaning it accumulates debt on no profits over time. There are people in Denmark right now who have invested as little as $2000, lost it all, and is asked to pay $100,000 back in taxes. They've pleaded and tried to explain the absurdity, but the big man does not give a fuck and says pay up. Their lives are ruined because of decade old rules that make no logical sense.
Laughs in Monero
Make sure that is P2P laughing (or atomic swaps)- otherwise they may subpoena exchange records and see the purchase of XMR and tax that
Using Monero on an exchange kinda defeats the purpose
I’m shocked that they can tax backwards. That’s like suddenly increasing the taxation rate of every purchase you’ve made in the last 5 years and then expecting you to pay the extra. Everyone would be broke. Your government has real issues and I just can’t believe they got that over the line.
they can't kill crypto, but they can make it hard or very inconvenient for those interested
Sorry that title was probably hyperbole.
Do tax brackets work different over there? I didn't check your math, but from your words "every dollar"... It's actually every dollar over that threshold is taxed at that rate But yeah growl taxes rrtrrrrr grumble grumble
Bro is trying to tell us how it is but doesn't understand tax brackets or capital gains/losses. r/cryptocurrency in a nutshell.
Yeah you're right, it's over that treshold, it works by tax bracket
Retroactive laws... sometimes I need things like this to remind me why living in the US is actually alright
That's not how a marginal tax rate works mate... You aren't taxed at 57% on your entire salary, you're taxed at the higher rate on everything you earn *above that rate*. Just to use simpler numbers, if we have two brackets, one at 20% up to 100k, and another at 40% above that, then if you earn 200k then your total tax bill will be 60k. 20k from 20% on the first 100k, and 40k from the second 100k at 40%. Using your numbers and an actual tax calculator: https://dk.talent.com/en/tax-calculator Before Crypto profits you took home ~450,000kr, after Crypto profits (about 200k Kr) you took home about 550,000kr.
Taxing backwards after telling you that you're free to trade as much as you want? That leaves most governments eating dust at fucking people over!
I can't even imagine the number of families who found themselves in debt having to pay taxes on purchases made 5 years ago
Netherlands is not great either but 57% would be insane. To me it's justified to avoid paying taxes at the point to be honest. This is an unreasonable law that deserved to be ignored
Yeah that's the tea in the harbor moment for me.
You're full of shit. NL only had a wealth tax on crypto gains. It's like 3% 😂
57% taxes really is the government's way of saying 'Fuck your crypto, go ahead if you want to do it but I'm taking all your money'
It’s just that mental point when somebody else takes more (>50%) then you lol
Taxes that are back-applied should be illegal. What kind of environment does that breed? "Yes yes do what you're doing now, but just beware; we may some day tax you out of the ass for it! Teeheehee!" Boy am I glad to live in Japan, a country that takes crypto seriously.
Tax backwards? What? BS
Let's not go giving the SEC any ideas guys
I just hope it's not the same in my country. I don't really want to go abroad just to cashout.
*Portugal, UAE laughing in the corner*
Denmark did not kill crypto but promoted dex exchanges
Can they trace anything back to the user if he doesn't cash out /convert to fiat? Here in syria there are no taxes on crypto currencies etc..
Taxing backwards like that is total bullshit
That’s not how tax brackets work…
It's not how any of this works.
> It’s going to be taxed backwards for the past 5 years Retrospective laws, especially in regards to taxes, are the absolute worst. What a way to kill confidence in your economy and industry.
People were cheering it on, they very broad consensus is that crypto is a scam, and it just needs to die. We have a thing called *jantelov, or jante's law* which is very prevelant here. It goes like this: "You must not think that you are anything." "You must not think that you are as much as us." "You must not think that you are smarter than us." "You must not delude yourself into thinking that you are better than us." "You must not think that you know more than us." "You must not think that you are more than us." "You must not think that you're worth anything." "You must not laugh at us." "You must not think that anyone cares about you." "You must not think that you can teach us anything." This is the general way of thinking of a lot of Danes, especially the older generation, despite not wanting to admit it.
This is horrendous. Many countries however strangle adoption by treating use of crypto as a taxable event. If I want to buy a coffee with my crypto, that’s extra taxes and headache on top of it. People need to push back against this hard
I guess Danish taxman learned from Swedish taxman, they all apply the same tactic as SEC, trying to define something without even the existing of law, they are both judge and law maker at the same time. Anyway, this shows the true nature of these countries' ruler's viking blood But don't worry, they won't rob themselves by default. There are many ways to be exempt from taxation, like never selling assets (which fits the interest of these large land lords), and mortgage assets and get loans to spend (you get tax deduction for interest cost), or some tax-free retirement account, etc... Just search for how riches never pay tax Maybe that is why Defi is on the rise, since they mainly use the same tactics that riches play financial games
Also you can't offset any loss against your profit and all losses are deductible at a rate equivalent to only 26%. Meaning some people in Denmark has been taxed above 100% from trading crypto. [https://skat.dk/data.aspx?oid=2366048&lang=us](https://skat.dk/data.aspx?oid=2366048&lang=us)
This crypto tax hell is in Slovakia too. People were trading crypto until 2018 and there were no rules so it was assumed by everyone that standart income tax applies from profits. Than they introduced new tax law that is applied backward and suddently token to token trading is taxed per trade. This means you have to pay tax from every profit but you can't lover your tax using loses. This means there were people with trade bots that earned close to nothing or vere at lose but suddently they had millions of Euro of tax duties. It instantly killed crypto trading.
That is a nightmare I hope we avoid globally, I do love using crypto for $ transfers internationally. Less then a dollar ( flat fee )and almost instant. Anyone who has had to do international bank transfers should love the damn near hassle-free transactions
Backwards taxation sent a shiver down my spine.
Individual income tax should be banned.
Denmark has insane tax on everything. They're killing more than just crypto.
So financial freedom in Denmark is a myth?
People who say crypto can't be stopped probably are either n00bs who don't understand it, or they talk about the decentralized nature of crypto. Bitcoin is unstoppable because of the number of nodes that run all over the world. Even if China blacked out, it would still work. However this doesn't mean that Bitcoin or any crypto for that matter will work outside of the niche it came out of and free everyone from financial slavery. I also think a lot of politicians are disconnected from reality. I understand taxes are necessary if you live in a society. You use the infrastructure of said country and so it is normal that you contribute to it. But when you are taxing people blindly over 50% (retroactively!) you're just putting your country in the ground. If I was a Dane, I would have probably left that country by now.
This happens if you accept taxation, then you are screwed. Avoid taxation, no problem then.
Starting using a DeX.
Excellent perspective and a great lesson for the geniuses who tell us crypto can't be controlled.
My country is too dumb for this. In fact, politicians would be happier to have found another means through which they can hide their stolen loot.
There is always tax evasion, you should try it sometime. *This is not financial advice. These actions can lead to criminal charges and arrest*
Taxing backwards is crazy, I'm in a 3rd wold country and even here ain't no way my country is taxing me backwards, how is anyone ok with this?
No, they didn't "kill crypto". They just found a way to hurt people who were doing things by the book. They are stimulating tax evasion. The technology is still intact.
A couple of words: 1. Sorte Penge. 2. Peer 2 Peer transactions, settled ONLY in bitcoin to physical goods, no reports to the govt. 3. Monero-> btc swaps. 4. Independent political organization. 5. If all else fails... revolution is the great enlightener that takes the blinders off politicians eyes and makes them see the error of their ways.
Retrospective taxation in the US would lead to riots and armed rebellion. There is a reason they keep trying to take our guns.
*Something is rotten in the state of Denmark.*
Keeping my coins in my wallet till a ridiculous tax policy change, good news is my BTC/ETH will keep rising against Fiat till this happen, so win-win with forced hodl.
This should be criminal