Denmark’s Tax Agency Shows 90% of Crypto Traders Failed to Report Gains: Study
Data from the Danish Tax Agency shows that more than 90% of crypto traders failed to report their gains or losses. Many have moved their trading to foreign exchanges to evade Denmark’s reporting rules. These findings com...
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Data from the Danish Tax Agency shows that more than 90% of crypto traders failed to report their gains or losses. Many have moved their trading to foreign exchanges to evade Denmark’s reporting rules. These findings come from a study by Hjalte Fejerskov Boas and Mona Barake published by the EU Tax Observatory.
The researchers combined trading data from Denmark’s three regulated crypto exchanges with tax filings and cross‑border bank transfer records. They found that over 90% of Danish investors who sold digital assets in 2021 did not report any crypto income on their tax returns.
This persistently high noncompliance rate remained virtually unchanged despite Denmark’s 2019 mandate requiring domestic exchanges to automatically share transaction data with tax authorities.
New research finds that despite stricter rules in Denmark , over 90% of crypto investors fail to declare income!
Domestic enforcement alone has limited effectiveness—global coordination is key to tackling crypto tax evasion.
Read more via @TaxNotes: https://t.co/oM75bNhUUe pic.twitter.com/igL0EFFmqL
They found that nonreporting was widespread across all wealth brackets, from 95% among investors in the bottom decile to 86% in the top decile, showing that crypto tax evasion is not limited to the very wealthy.
Rather than comply, many Danish traders have shifted their activity offshore, according to the study. Bank‑transfer records show a sharp and sustained migration from domestic to foreign exchanges immediately after the reporting requirement took effect.
Denmark’s findings mirror trends elsewhere. A recent Norwegian study estimated that roughly 88% of crypto traders there omitted gains in 2023, while US IRS data indicate fewer than 1% of American taxpayers reported crypto profits in 2020.
Experts attribute widespread underreporting to blockchain’s anonymity and easy access to unregulated international exchanges.
New Rules Aim to Level the Playing Field for InvestorsIn response, policymakers are advancing toward coordinated global reporting standards. Beginning in 2026, the OECD’s Crypto‑Asset Reporting Framework and the EU’s DAC8 will compel crypto platforms worldwide to share transaction data with tax authorities.
However, critics warn that the effectiveness of these measures depends on universal participation — decentralized peer‑to‑peer trading and noncooperative jurisdictions could continue to undermine enforcement.
Domestically, Denmark is also weighing tougher measures. In October, the Danish Ministry of Taxation proposed a 42% tax on unrealized gains from cryptocurrencies acquired since Bitcoin’s inception in Jan. 2009.
Tax Minister Rasmus Stoklund argued that many crypto investors have faced unfair treatment under the standard capital gains regime and said the new rules would simplify how crypto gains are taxed.
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