Denmark's Supreme Court has ruled in two rulings that profits from the sale of bitcoins should be taxed. One of the subjects of the review received bitcoins as donations for the software he developed and purchased on the market, then sold them at a profit. Another received bitcoins by providing server power for mining, then also sold them for profit.
The notice of the Supreme Court on the outcome of the consideration of both cases says:
“In the years 2011-2015, A acquired bitcoins through six purchases and as donations received by him from third parties in connection with the development and provision of software for [working with] bitcoins. In 2017 and 2018, he sold these bitcoins at a profit.
Between 2011 and 2013, B purchased bitcoins as a reward for providing server power for the bitcoin system and verifying bitcoin transactions (mining). In 2018, he sold some of these bitcoins at a profit.
The cases concerned whether A and B's profits from the sale of bitcoins were taxable.
The Supreme Court held that A's purchase of bitcoins must be treated as speculative and that, therefore, the sale of those bitcoins was not exempt from tax under section 5, subdivision 1, letter a, of the Internal Revenue Code.
The Supreme Court also declared that A's sale of the bitcoins he had acquired as a donation and B's sale of the bitcoin assets he had acquired through mining constituted the turnover of their non-profit enterprises. Thus, the sales give rise to tax liability under section 4(a) of the State Taxation Act.
In both cases, the Supreme Court reached the same result."
Denmark's Supreme Court found that investing in Bitcoin was speculative, upholding the lower courts' decision, according to its statement today.
"The Supreme Court assumes that bitcoins are generally purchased only for the purpose of sale and, to a limited extent, for use as a means of payment."
Bloomberg notes that, based on court decisions, the recognition of bitcoin as a speculative asset applies both to resale for profit and to the sale of cryptocurrency obtained as a result of mining.
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