Skattestyrelsen, the Danish tax authority, has sent up to 20,000 warning letters to crypto users suspected of being tax avoiders seeking information on their business activities.
According to reports, the tax investigation in Denmark seems to have started as early as the beginning of 2019 and the warning letters have been sent in the last two weeks.
These are 20,000 crypto traders under investigation which were warned by the authorities to modify their tax reports by December 15th, otherwise, they will be fined.
The basic idea of this action seems to be to act against those people who view the crypto world as a safe haven from taxes.
Robin Singh, the founder of Koinly, a Swedish startup that automates the calculation of crypto taxes in the Scandinavian countries, commented on the Danish tax action:
“Many of our Danish users have received these letters, Skat is asking for a full breakdown of all their transactions and asking them to fix all past reports as well. Filing tax on cryptocurrency trades is a difficult task as crypto traders usually hold several exchange accounts & wallets and freely transfer crypto between them, so there’s no easy way to figure out what the capital gains are for any particular trade”.
Despite the difficulty of calculating the amount of taxes on cryptocurrencies, the company’s invitation remains to respond to the Danish tax authority with the requested information and, if necessary, modify past tax returns.
The action taken by Skattestyrelsen is not so unusual. In fact, only last summer the same situation happened in the USA with the intervention of the Internal Revenue Service (IRS).
Last August, the IRS sent similar letters to crypto traders who believed they were suspected of tax evasion, giving them 30 days to respond and correct their situation.
Admittedly, just last month, there was the news that the same IRS was going to refund the crypto investors who had paid taxes in an appropriate way.
This is still an unclear situation that many crypto experts had described as a purely marketing action: a strategy of the American tax authorities to identify the largest number of crypto holders and thus monitor the trend on the territory.