Taxation of Crytpoassets

Martin Lang Johannesen & Annemette Wind

Student thesis: Master thesis


The aim of this Master’s Thesis is to analyze the taxation of profit and loss upon the transfer of cryptoassets in accordance with Danish taxation law.
The study examines the taxation of physical persons profit and loss from transfer of Bitcoins. The legal analysis indicates that Bitcoins should be qualified as a private asset (formuegode) and should be taxed according to the Act on Taxation of Income and Property (Statsskatteloven) § 5, litra a. This means that profit and loss are free of taxation unless the transfer is related to the taxpayer’s course of business (næring) or acquired with the intend of resale with profit (speculation). Bitcoins is found to be suitable for speculation and therefore often taxable.
The thesis also examines the legal qualification and thereof taxation of three types of Initial Coin Offerings (ICOs): Utility Tokens, Security Tokens and Equity Tokens. The examination is based on three specific tokens and finds that Utility Tokens (with relation to the token BAT) should also be taxed as a private asset according to the Act on Taxation of Income and Property. The study finds that Security Tokens should be qualified in the same manner, which is opposed to current opinion of the Danish Tax Authorities. The tax authorities believe that the Security Token Bookcoins should be qualified as a structured debt according to the Gains on Securities and Foreign Currency Act (Kursgevinstloven) which lacks support in the law as Bookcoins cannot be considered money in Danish law.
Equity Tokens is considered with relation to the upcoming ICO of Founders Bank. The study finds that investors can be taxed according to the Capital Gains Tax Act (Aktieavancebeskatningsloven) under the assumption that the tokens provides legal right to proceeds from the company in the event of liquidation. It is also concluded that companies raising capital by issuing Equity Tokens can be free of taxation if the tokens represent the company’s equity, and that investors are compensated through the issuance of shares. It is therefore also analyzed if Equity Tokens legally can represent shares in a Danish limited company (aktieselskab). The conclusion is that it is a possibility if the tokens are issued through a CSD (værdipapircentral).

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2018
Number of pages101
SupervisorsLouise Fjord Kjærsgaard