Denmark to Impose 42% Tax on Unrealized Crypto Gains Starting January 2026

Denmark will become the first country to tax inactive gains from crypto investments. Starting 2026, Danish crypto investors may face a tax rate of up to 42%

Denmark is set to become the first country to impose a tax on inactive gains from cryptocurrency investments, according to a new proposal.

Starting 2026, Danish crypto investors may face a tax rate of up to 42% on unused capital gains, similar to the taxation of digital assets like Bitcoin (CRYPTO: BTC).

The proposed legislation, developed by Denmark’s Tax Law Council, will also apply to crypto assets acquired since Bitcoin’s 2009 launch.

The proposal comes amid a broader effort by European countries to regulate and tax the rapidly growing cryptocurrency market.

What Happened: If approved by the Danish Parliament, the proposed tax will target inactive gains on crypto holdings. Investors will be taxed on the increased value of their digital assets, even if they haven’t sold or realized the gains by trading them.

In a press report, Denmark’s Tax Minister Rasmus Stoklund said the changes will align crypto investments with the country’s existing tax policies on other forms of capital gains.

"We are now proposing to introduce a tax on inactive gains on other assets as well, such as shares, bonds, and cryptocurrencies, if the assets have been owned for more than three years."

The goal is to create a fairer system, given the increasing number of Danish investors entering the crypto market.

"Many Danes have made large capital gains on their crypto holdings, which they have not yet paid tax on,” Stoklund added. "This is completely legal today, but it is obviously unfair."

Related Link: Denmark To Tax Bitcoin, Other Crypto Assets Held For Over 3 Years At 42% Rate Starting 2026

Why It’s Important: Denmark's decision on crypto taxation could influence other countries within the European Union.

Denmark’s tax bill also recommends that crypto exchanges and service providers report customer transactions to EU authorities, ensuring transparency and regulatory alignment across member states.

Meanwhile, Italy is also considering a tax increase for Bitcoin holders. As part of its 2025 budget plan, Italy’s Deputy Economy Minister Maurizio Leo has proposed raising the capital gains tax on Bitcoin from 26% to 42%, aligning it with the new Danish rate.

"We are proposing to increase the capital gains tax on Bitcoin from 26% to the ordinary rate of 42%,” said Leo. "This will bring the taxation of Bitcoin into line with other capital gains."

In addition to the proposed crypto tax hike, Italy plans to eliminate the minimum revenue threshold for its Digital Services Tax (DST), a tax imposed on digital companies operating within the country.

DST currently applies to companies with an annual global turnover of €750 million ($797 million) and at least €5.5 million ($5.9 million) in revenue in Italy.

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