Country overview

#87

Denmark

Country stats

Rating Points

135

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

1.2%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Empty

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

100

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

69 600

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

97.1

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

No info

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Safe place

The overall level of security in a given country based on open data.

Crypto Salaries

No info

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Difficult

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

Low

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Wallet/Custody

This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.

Good

Medium

Bad

intro

Denmark has a fairly elaborate system of cryptocurrency regulation. However, the relatively small market size, tax burden, and restrictions hinder the development of crypto-business in the country.

Security level

Denmark is qualified as a safe place according to our security level rating. This jurisdiction has 73.4 points (from 100) for safety level in Numbeo crime rating (1). The homicide level (2) is 0.8 per 100,000 inhabitants a year. Level of firearm-related death (3) 0.91 per 100,000 inhabitants a year.

Crypto Payments

Being paid in cryptocurrency, either as a salary from employment or in exchange for services as a freelancer, is taxed similarly (4) to being paid in Danish kroner or another fiat currency. This means that from a tax perspective, there is no practical difference in what type of currency you receive your compensation – the income amount will be taxed as income in all cases. National bank policy on different forms of money(4¹).

Crypto Salaries

You'll pay(5) your regular salaried tax rate for crypto tax, excluding the 8% labor market tax. The 8% market tax does not apply to crypto assets.

Legal

The Danish Financial Supervisory Authority (FSA) is the foremost supervisory authority in Denmark, although the National Bank also has an oversight role.

The European Banking Authority (EBA) published(6) a warning on virtual currencies on 12 December 2013 (the Warning) that defines virtual currencies as a form of unregulated digital money that is not issued or guaranteed by a central bank and that can act as a means of payment. However, on 10 January 2020, an amendment to the Danish Act on Measures to Prevent Money Laundering and Financing of Terrorism (the AML Act) came into effect(7), which defines a virtual currency as a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically. The definition of virtual currency was inserted into the AML Act as part of the Danish implementation of the Fifth Anti-Money Laundering Directive (AMLD V; see Section IV).

Denmark has no laws explicitly addressing cryptocurrencies. In 2021, Danske Bank, the largest bank in Denmark, stated that it won’t offer any cryptocurrency services to customers itself but also that it wouldn’t interfere with transactions(8) coming from crypto platforms.

Taxation

Tax name	Index
PIT tax Min	8
PIT tax Max	52
Corporate tax (CIT)	22
Min Individual CGT (for crypto)	27
Max Individual CGT (for crypto)	42
Wealth tax Min	0
Wealth tax Max	0

PIT

An individual who is fully tax resident in Denmark will, as a main rule, be taxed according to the ordinary tax scheme by up to 52.07% based on PWC(9).

CIT

The CIT rate is 22% under PWC(10).

CGT

Capital gains are subject to the average CIT rate of 22% - 27% according to PWC(11).

You can find more information about crypto taxation procedures in the cryptocurrency taxation guide (12) from The Danish Customs and Tax Administration (Skatteforvaltningen).

Links

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3)List of countries by firearm-related death rate

4)Crypto Tax Guide Denmark – Updated 2022. Article

4¹)National bank policy on different forms of money

5)Kryptovaluta Skat Danmark: 2023 Guide. Article

6 and 7)The Virtual Currency Regulation Review - The Law Reviews. Article

8)Denmark’s largest bank is cautious on crypto, but won't interfere. Article

9)Individual - Taxes on personal income. PWC

10)Corporate - Taxes on corporate income. PWC

11)Overview. PWC

12)Nu kan du tjekke din forskudsopgørelse for 2024. Article

Articles

research

What Can Trump Change in US Crypto Regulation?

Review of republicans' approach to crypto regulation in the US and their next steps.

article

Brazil: Hot Spot for Nomads and Biggest Fintech Market in LatAm

Brazil is a big economy with low legal barriers for crypto companies and here it's why.

review

Indonesia, Turkiye, Nigeria and Other Emerging Crypto Markets in 2024

Asia and Africa are the most perspective crypto markets by amount of users, and we review crypto legislation in key countries in these regions.

intro

Denmark has a fairly elaborate system of cryptocurrency regulation. However, the relatively small market size, tax burden, and restrictions hinder the development of crypto-business in the country.

Security level

Crypto Payments

Crypto Salaries

You'll pay(5) your regular salaried tax rate for crypto tax, excluding the 8% labor market tax. The 8% market tax does not apply to crypto assets.

Legal

The Danish Financial Supervisory Authority (FSA) is the foremost supervisory authority in Denmark, although the National Bank also has an oversight role.

Taxation

Tax name	Index
PIT tax Min	8
PIT tax Max	52
Corporate tax (CIT)	22
Min Individual CGT (for crypto)	27
Max Individual CGT (for crypto)	42
Wealth tax Min	0
Wealth tax Max	0

PIT

An individual who is fully tax resident in Denmark will, as a main rule, be taxed according to the ordinary tax scheme by up to 52.07% based on PWC(9).

CIT

The CIT rate is 22% under PWC(10).

CGT

Capital gains are subject to the average CIT rate of 22% - 27% according to PWC(11).

You can find more information about crypto taxation procedures in the cryptocurrency taxation guide (12) from The Danish Customs and Tax Administration (Skatteforvaltningen).

Links

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3)List of countries by firearm-related death rate

4)Crypto Tax Guide Denmark – Updated 2022. Article

4¹)National bank policy on different forms of money

5)Kryptovaluta Skat Danmark: 2023 Guide. Article

6 and 7)The Virtual Currency Regulation Review - The Law Reviews. Article

8)Denmark’s largest bank is cautious on crypto, but won't interfere. Article

9)Individual - Taxes on personal income. PWC

10)Corporate - Taxes on corporate income. PWC

11)Overview. PWC

12)Nu kan du tjekke din forskudsopgørelse for 2024. Article