Denmark: Tax treatment of GALA tokens clarified
The Danish Customs and Tax Administration issued Tax Council Binding Answer No. SKM2025.117.SR, clarifying the tax treatment of trading and earning GALA tokens, a type of cryptocurrency. The ruling addressed questions from an individual taxpayer regarding the classification of GALA token transactions, taxability of earnings, and expense deductions.
The Tax Council, aligning with the Tax Agency’s recommendations, concluded the following:
- Trading in GALA tokens is not tax-exempt.
- Earnings from providing server power to the GALA universe, received as GALA tokens, are not tax-exempt and are considered hobby income.
- NFT purchases were not deemed a deposit into the game, and therefore, their cost cannot be deducted from gaming winnings.
- Expenses for acquiring and operating server power are deductible against hobby income.
The ruling clarifies the tax treatment of cryptocurrency-related activities, particularly regarding hobby income and deductions.
Source: skat.dk
