The Danish tax ministry will examine its nearly century-old tax code in an effort to address challenges raised by cryptocurrency investments. According to a report by Bloomberg on Tuesday, Denmark’s Ministry of Taxation has discovered two-thirds of local crypto transactions aren’t properly taxed, and as such, is moving to close the gap. The ministry cites a heightened risk of fraud and an increased number of errors in tax filings as the main catalyst for cracking down on crypto tax evasion.
Denmark will identify specific challenges to tax authorities that the nascent asset class brings and then decide on what to change in the tax legislation, per the report. The country’s tax minister, Morten Bodskov, said his department’s goal was to remain “vigilant and ensure that our rules are up-to-date and limit errors and fraud.” In 2019, Denmark’s tax authority, the Skattestyrelsen, sent out letters to suspected tax dodgers asking them to amend previous returns based on their crypto activities and warned them of penalties for non-compliance.