Finland Discovers €30M in Unreported Crypto Gains

Finland’s Tax Authority has uncovered €30 million ($31.9 million) in undeclared profits from cryptocurrency transactions in 2023. 

The European country now requires the declaration of earnings from the trading and mining of digital currencies. 

A Big Crypto Trove In Finland

According to a report by Verkkouutiset, a Finnish news outlet, following the discovery of these undisclosed earnings last year, the tax authorities are demanding €10 million in taxes on capital gains from those involved in cryptocurrency investments. Mika Siivonen, a tax specialist at the Finnish Tax Administration, commented, “The significant amount detected last year demonstrates the effectiveness and efficiency of our monitoring system.”

In addition to tax payments, individuals who fail to report their earnings must pay additional taxes and late fees. Failure to comply may result in criminal charges, according to the report. The tax authority in the country discovered that in 2022, a total of 9,800 individuals reported income from cryptocurrencies, a decrease from the 16,000 reports in 2021. The report suggests, “When the exchange rates for digital currencies were low, investors tended to sell their assets less frequently than before, or did not report their trading losses for tax purposes.”

Finnish Individuals Receiving Crypto Earnings Fail to Declare Taxes

Siivonen mentioned that there has been an increase in information received from cryptocurrency exchanges about the transactions made by users in Finland. Despite this, many individuals receiving cryptocurrency income still neglect to report it for tax purposes. 

The Tax Administration has obtained data on these transactions from various international cryptocurrency exchanges through global data sharing. The guidance for those who have earned income through cryptocurrency usage or mining in 2023 is to ensure this income is reported on a pre-filled tax return form. 

Additionally, the guidance clarifies that cryptocurrency earnings are subject to capital gains tax, while income from mining is considered earned income for tax purposes. It is also noted that losses from selling virtual currencies must be reported for taxation purposes.

Disclaimer

This article is provided for information only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.