Denmark: Clarification on taxation of locked and released digital currency

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The Danish Customs and Tax Administration published Tax Council Binding Answer No. SKM2023.425.SR, which provides clarification regarding the taxation of digital currency locking and release. In this case, the taxpayer deposited digital currency on a specific platform with the expectation of receiving a return after a “locking” period of up to 12 months. During this time, the platform used the deposited currency as collateral for lending to third parties. The taxpayer sought clarification on the tax implications of this locking and release process.


The Tax Council’s response included the following key points:


  1. Locking the speculative deposit did not trigger a taxable event. This was because the taxpayer could not withdraw the deposit during the agreed-upon period, terminate the period prematurely, retained ownership rights, and the deposit’s nature remained unchanged while locked.
  2. The release of the deposit also did not result in a taxable event. This was because there was no change in ownership when the deposit was released, and the assets’ character remained consistent at that time.



Source: info.skat.dk

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