Appendix 6: Denmark

Highlights

• No specific legislative provisions governing custodianship of virtual currencies or cryptocurrencies exist under Danish law. In a 2013 statement, the Financial Supervisory Authority emphasized that it had evaluated the use of the cryptocurrency system and found that cryptocurrencies such as bitcoin do not fall under any of the financial services categories, including the issuing of electronic money, payment for services, currency exchanges, or the issuing of mortgages; thus, the Authority concluded, such virtual currency activity was not covered under current financial regulations.
• In 2018, the Danish Tax Council declared that losses (and, implicitly, gains) on the sale of certain cryptocurrencies (in this case bitcoins) that were purchased as an investment generate a tax benefit and subject to income taxation.
• In 2014, the Danish Tax Authority published a binding interpretation of law (in reply to a public question from taxpayer) declaring that invoices cannot be denominated in virtual currency but must instead be issued in the official Danish currency (Kroner) or another recognized currency.

Virtual Currency-Specific Regulations

• Danish Financial Supervisory Authority, [Danish Financial Supervisory Authority Considers a Concrete ICO] (Oct. 3, 2018)
• SKAT (Danish Tax Authority), Case number 13-0086594: [Bitcoins, not commercially justified, considered separate business] (Apr. 2014)
• European Securities and Market Authority (ESMA), Advice: initial Coin Offerings and Crypto-Assets (Jan. 2019)

Nonprofit Regulations

• European Foundation Centre, EFC Legal and Fiscal Country Profile: Denmark (2014)
• European Commission, European Foundations for Research and Innovation, Denmark Country Report

Tax Regulations

• SKAT (Danish Tax Authority), Your Danish Tax Affairs
• European Association of Tax Law Professors, Taxation of Charities: Denmark
• Organisation for Economic Co-operation and Development (OECD), Denmark: Information on residency for tax purposes
• European Court of Justice (ECJ), Skatteverket v. David Hedqvist (Case C-264/14) (2015) [holding that buying or selling bitcoin is exempt from VAT in all EU states]

Anti-Money Laundering Regulations

• EU, Anti-Money Laundering Directives (2018)
• EU, Anti-Money Laundering Directive (2015)
• EU, Second Electronic Money Directive (2009)
• EU, Second Payment Services Directive (PSD2) (2015)
• EU, Market in Financial Instruments Directive (MiFID 2) (2014)

Other Relevant Regulations, Sources, Notes

• Law Library of Congress, Regulatory Approaches to Cryptoassets in Selected Jurisdictions: Denmark (April 2019); Id., European Union
• Deloitte, International Tax: Denmark Highlights 2019
• OECD, Report on Abuse of Charities for Money-Laundering and Tax Evasion