Taxes on cryptocurrencies in Sweden?

Sweden is one of the nations where cash and coins are hardly used anymore. The Scandinavian country is going cashless and so are its people. Generally speaking, the country is accepting of cryptocurrencies and sees a lot of potential in them. However, keeping track of one’s transactions and declaring Bitcoin and co. in the tax report are very important steps in order to avoid fines and extra taxes.

Cryptocurrencies in Sweden
Cryptocurrencies in Sweden are considered legal and their use is accepted by the authorities. However, the Swedish tax legislation does not view them as currency nor cash, but rather as individual transactions involving assets. Some academics argue that they cannot be defined as property, but Swedish law has not yet found a proper definition for Bitcoin and co. So for now the most important factor to determine the taxation and legal handling is the price of the cryptocurrency at its acquisition and keeping track of all transactions involving digital assets.

The Taxation of Cryptocurrencies in Sweden
In Sweden, individuals have to declare all of their transactions made through the use of cryptocurrencies on an annual basis. The authorities advise you to keep a list of all your spending, trading, lending and even for using them as a gambling bet.
For trading, capital gains tax is applied to cryptocurrency which is at a flat rate of 30%. Losses are deductible for up to 70%
If it is held like a stock though, any realised profit is considered income from business operations. Income tax in Sweden is based on a progressive model depending on various factors. The current average income tax rate is at 32%.

Generally, it is highly advisable to keep track of one’s use of cryptocurrencies for any intended purpose, as improper documentation may result in having to pay heavy fines and even higher taxes. In early 2019, Swedish crypto-trader Linus Dunker learned this lesson the hard way when he received a tax bill of 300% of all profits he ever made off trading crypto. He had been trading since 2014 and simply never reported the individual transactions and the correct price he initially paid for buying them. Ultimately, this got him a fine of 1,000,000 USD!

For businesses dealing with crypto, especially trading platforms, there are not specific laws. However, they have to be registered like any other business in Sweden. It is highly likely that there will be more laws and regulations for businesses that deal with Bitcoin and co. in the future.
Depending on the exact purpose of mining any income generated through it is either subject to income tax for employment or business operations.

Recent Developments
With physical money slowly disappearing in everyday life, Swedish lawmakers are aiming to restate the concept behind legal tender, which may mean that crypto-assets will be included in the future. The Riksbank, the official bank of the country, even has set up plans to launch their own digital currency, the e-kronor. Even the Swedish national mapping authorities (Landmäteriet) are set out to implement blockchain-technology to speed up property sales.Currently, there are many debates going on in Sweden about how the financial system of the future will look like and what the definition of currency will be, since the country is slowly saying goodbye to cash. Only time will tell how the country will draw up its rules and laws for digital assets.

Free Crypto Tax & Portfolio Software
In recent years, it has been observed that the trade in cryptocurrencies such as Bitcoin, Litecoin and Ethereum has steadily increased. However, many cryptocurrency owners do not consider that the profits or losses from trading cryptos are taxable. Therefore Blockpit offers software that meets the requirements for traders of Bitcoin, Ether and Co. Besides the webapp Blockpit also offers a mobile app that is free for iOS and Android. With the API import, transactions can be imported from different exchanges without much effort. Taxes on cryptocurrencies do not need to be complicated – use Blockpit

Crypto Tax Software from Blockpit

Sources
https://cointelegraph.com/tags/sweden
https://tokentax.co/blog/swedish-crypto-trader-gets-usd1mm-tax-bill
https://blocktribune.com/crypto-trader-from-sweden-paid-million-usd-in-taxes/
https://blockchainpr.online/2019/02/24/swedens-tax-on-crypto-trading-how-declare-your-earnings/
https://www.newsbtc.com/2019/04/29/crypto-day-of-reckoning-in-sweden-central-bank-urges-clarification-on-legal-tender/
https://home.kpmg/xx/home/insights/2011/12/sweden-income-tax.html
https://www.osborneclarke.com/insights/taxation-of-cryptocurrencies-in-europe/

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Disclaimer: The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim either correctness or accuracy. For detailed information on crypto regulations, we recommend contacting a certified legal advisor in the respective country. If any questions occur, feel free to contact us on our social media channels.

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