Bitcoin (BTC) Trades Triple Tax Obligations for Swedish Investor
Crypto investor Linus Dunkers has accused the Swedish Tax Agency of mistreatment, while the authority claims he did not follow the rules when filing his 2016 tax return.
A Swedish crypto trader named Linus Dunkers has accused the local taxation agency of unfair treatment as the body imposed 300% taxes on his Bitcoin (BTC) trading profit, public television SVT reported over the weekend. The Swedish Tax Agency (STA) denied the accusation, saying the investor did not correctly reveal his crypto business activities in 2014-2016.
According to Dunkers, he traded BTC worth 25 million Swedish kronor ($2.7 million) in this period, and the STA is now demanding that he pay 8 million Swedish kronor ($886,132) in taxes. Until 2016, the agency did not have any clear position on cryptocurrency income, the trader said, so he was declaring it a ‘hobby activity.’ Around two years ago, the STA instructed him to put the BTC activity in the category of capital income in the annual tax return.
After the call, Dunkers declared by name the virtual coin trades and described them as personal capital gains, meaning he was supposed to pay 30% taxes.
According to the STA, however, Dunkers’ Bitcoin trades were business activity, and he was aware of the fact that he owned a company. Moreover, he did not deduct the price of his initial cash-paid crypto purchase, which was a severe violation of local laws, so he is now obliged to pay higher taxes.
“It's absurd. I will pay 300 percent of the profit instead of 30 percent, it should not be legal,” Dunkers said.
The trader claims the STA wants to create a legal precedent with his case and pursue other cryptocurrency investors in a similar situation. Dunkers plans to sell some of his company shares and take loans to pay off the tax obligations.
In the past two years, the STA has increased its involvement in the crypto industry. In 2018, the agency opened 400 investigations into virtual coins-related activities, which is ten times as many inquiries as in 2017. The STA’s crypto work brought many investors’ income to light, control coordinator Henrik Kisterud said last week.
Recently, several taxation bodies have announced various crypto initiatives, including guidance published by Her Majesty Revenue and Customs (HMRC) in the UK and a warning from the Australian Taxation Office (ATO).