Danish tax authorities are planning to collect information about the country’s Crypto traders in the country and beyond. Local exchanges are expected to play a major role in providing the identities of their customers to help the authorities to achieve their goal. Other countries also stand to benefit, as they will get important information about the Crypto activities of their nationals.
Target Agency Targets Three Exchanges In Denmark
Skatterådet, the Danish Tax Council has ordered the country’s Tax Agency, Skattestyrelsen to gather data on Crypto trades on three Danish exchanges. The government will collect all the information from Jan. 1, 2016 and Dec. 31, 2018. This is the first time the authority is seeking such information from the Crypto firms. According to the agency’s director for personal income tax collection Karin Bergen, the move will allow the authority to get control in the sector.
The three Danish Cryptocurrency exchanges will not have any other option but to provide information about their customers. The country’s tax authorities will have access to two-year data about all the purchases and sales of different virtual currencies on these exchanges. The platforms will provide personal information such as names, ID numbers, CPR numbers, and addresses of their customers.
Denmark To Share Information With Other Countries
Last December, the Tax Council held a meeting that among other things allowed the Danish Tax Agency to gather the information. The agency had received information from their counterparts in Finland about Danish citizens engaging in Crypto trade in Finish exchanges. Denmark has already committed to sharing the data on Cryptocurrency transactions by foreign nationals and companies with other countries.
Skattestyrelsen is now planning to work closely with the three exchanges in the country to establish the procedure to be used in disclosing this data. Crypto traders in the country are not at peace bearing in mind those who haven’t been filing their returns have nowhere to hide to. The Tax Agency will use the information to compel those who have participated in Crypto trade pay their tax.
The Need To Look Into The Crypto Market
For a long time, Crypto traders in different countries around the world have been participating in their activities without the hurdles faced by their counterparts in other sectors. Although virtual currencies were designed to bypass governments and other third parties, they have come under criticism for their potential to support illegal activities. Money laundering, tax evasion, and terrorism financing are some to the areas where the coins can be used. However, governments worldwide have been trying to come up with clear regulations to control the sector.
Bergen said that the Crypto sector is a big market that the government needs to look into. He added that although the information they received from Finland was not much, it was a representation of the larger picture. The senior official said that they now have the opportunity to get more information about the sector.
Last December, the Finnish tax authorities informed their Danish counterparts about 2,700 Danes who engaged in Crypto trading in Finland-based Cryptocurrency exchanges. Between 2015 and 2017, the Dane traders traded altcoins worth over 100 million krones (~$15 million). A recent survey by the National Tax Board established that the country has over 450,000 Crypto users. The government has been involved in a campaign to inform the citizens on their obligation to pay their taxes.