When should I declare my cryptocurrencies?
How cryptocurrencies are taxed in Sweden.
The Supreme Administrative Court, like the Tax Court, considers that Bitcoin and other crypto cannot be equated with a co-ownership or foreign currency. The sale of Bitcoin and other crypto must therefore be taxed in accordance with the provisions on other assets in Chapter 52. Income Tax Act, IL. Bitcoin and other crypto can not be a so-called personal asset, which means that the overhead amount must be calculated according to the Average Cost Basis method (Genomsnittsmetoden).
There are three potential types of taxes to consider when you declare your crypto taxes in Sweden, where the most common one is Capital Gains tax (mentioned above), where you use the Average Cost Basis method. To correctly calculate any gains you will have to figure out your cost basis (Omkostnadsbelopp), then you will look at the Price you sold for - cost basis (omkostnadsbelopp) = profit or loss, if you have made a profit you pay 30% in tax on your profit amount, if you have made a loss then you can deduct up to 70% of the loss when you declare your tax.
How do I find out my cost basis (omkostnadsbelopp)?
The average price that you purchased the crypto in (of your local currency, which in Sweden is SEK) is your cost basis. If you however mined or received crypto as an income, the cost basis will be the value of the coins (in your local currency) on the day you received them.
Skatteverket provides many good examples on their website for this, see here.
You submit your capital gains tax using the K4 form under section D.
The second of the three types of taxes when you declare crypto is Income Tax, this is when you have earned crypto as an income from some type of work and you will need to pay an income tax on that amount, just as if you would have been paid in your local currency. If you decide to keep the crypto that you have received you will have to pay capital gains tax on any profit or loss when you sell. The cost basis in this scenario would be equivalent to the amount you declared on your income tax return. For example if you earn 1 ETH from work, which is currently worth around 31600 SEK, you declare that amount as your income tax. If you sell that 1 ETH a year later and it is worth 40000 SEK, you will have made a profit of 8400 SEK, and that profit will have to be taxed as capital gains.
To calculate your income tax you simply calculate the sum from the different transactions that contribute to your income tax.
You submit your Income Tax in two different ways, if it is a salary, you declare it under Inkomst av Tjänst. If it is from mining, you have to fill out a T2 form.
The third of the three types of taxes for declaring crypto is Interest Income Tax (Ränteinkomst). If you have received cryptocurrency in the form of staking rewards or loan interest. Similarly to Capital Gains Tax it is taxed at 30%, the only difference being that any losses made here are fully deductible.
To calculate your Interest Income Tax you simply calculate the sum from the different transactions that contribute to your interest income tax.
It is a bit unclear how it should be declared, in a conversation with the tax authorities (Skatteverket) we came to the conclusion that income from interest can be declared in the K4 form section D (see picture) and not in section 7.2 Interest income, dividends, profit from Enclosure K4 section C ( listed bonds, currency, etc.).
Borrowing FIAT currency, e.g. USD, SEK, EUR in exchange for crypto is taxed as a sale and must be declared as a capital gain.
Closing your loan or taking back your crypto does not count as a taxable event and does not need to be declared.
Here we have summarised various taxable events for which you are liable to pay tax. We at Kryptoskatt are not responsible for the Tax Agency rules regarding the taxable events not matching our information. This is not tax advice, we therefore ask you to contact the Skatteverket for more information with questions or concerns.
To trade crypto for crypto or crypto for stack coins (TUSD → BTC eller BTC → TUSD) is a taxable event and is taxed as a capital gain.
If you have invested in bitcoin then switch your Bitcoin to Ethereum. Switching from one cryptocurrency to another requires you to make a capital gains calculation. Samira has previously bought 10 Bitcoin for SEK 100,000 and she exchanges these for Ethereum. Her overhead amount for the Bitcoin she exchanged for will thus be SEK 100,000. The sale price will be the value in Swedish kronor of the Ethereum that Samira received at the time of the exchange.
ICOs are taxed as sales. In case of successful sale, the overhead amount is the market value of the cryptocurrency that you used to participate.
Purchases of goods and services are taxed as sales and must be declared as capital gains.
The realised gain or loss is taxed as a capital gain when the position is closed.
If you realised a profit, the cost base profit is applied after you have paid the capital gains tax. In the event of a loss, it works in the same way as if you sold your crypto for 0 SEK, the loss is equal to your crypto's average cost base.
Buying crypto is not a taxable event. However, it is important to keep track of the price of the cryptocurrency at the time of your purchase, in order to later be able to calculate the correct overhead amount when selling.
Transfers between different wallets do not need to be taxed. For your own sake, it is good to book your transactions, as it will make it easier for you to calculate the overhead amount.
Lost, hacked or stolen crypto is not taxed. If you have made a profit on your crypto, the profit is taxed regardless. You can therefore not compensate for lost or stolen crypto against your winnings. You remove the relevant cost base from your calculations.
Giving away or receiving a crypto as a gift is not taxed. This also applies to donations that must however be taxed on sales.
Donating is similar to giving a gift, it is not a taxable event in Sweden. To be considered tax deductible the gift must be given in a form of currency to an accepted charity, and Skatteverket does not consider cryptocurrency a currency.
Staking of a cryptocurrency is taxed as a sale and must be declared as a capital gain.
Staking rewardsis classified as an income and should therefore be taxed as a gain, just like the interest rate on a loaned crypto.
Ending your staking or taking back your crypto does not count as a taxable event and does not need to be declared.
Usually when you participate in liquidity pools you receive a Liquidity Pool Token (LP token). Skatteverket has shared information where it states that depositing crypto into a Liquidity Pool should be seen as a sale, as you in return receive a LP Token that has its own cost basis. Once you exchange your LP Token for your deposited share of crypto in the liquidity pool, you pay capital gains tax on the profit you made on the token. Here is an article published by Skatteverket if you wish to read more about it.
Buying NFTs is not taxed, however, it is important to keep track of the price of the NFT at the time of your purchase in order to later be able to calculate the correct overhead amount when selling.
To purchase an NFT with crypto (ETH → NFT) is taxed as a sale and must be declared as a capital gain.
The sale of an NFT is a taxable event and must be declared as a capital gain.
The sale of NFTs for crypto is a taxable event and must be declared as a capital gain.
A sale of NFT for another NFT is a taxable event and must be declared as a capital gain. It is important to keep track of the price of the NFT at the time of your purchase in order to later be able to calculate the correct overhead amount when selling.
If you have received cryptocurrency as payment in your business, the subsequent change in value should normally be taxed as income from capital. However, this does not apply in businesses where the cryptocurrency is an inventory asset, for example if you run an external exchange business. In such cases, you must report the income as income from business activities.
Example - business
Olof sells goods in his web shop on the internet. He charges in bitcoin. Olof books each sale separately in Swedish kronor based on the value on the day he is paid in bitcoin. Since bitcoin does not constitute stocks in this type of business, Olof is considered to make his own withdrawal of bitcoin the moment he receives them.
In January, he booked sales income and VAT with a total of SEK 34,500 and during this period he received a total of 0.4 bitcoin, which he then takes out and then sells for SEK 36,000. This must be reported in the income category capital in Enclosure K4, section D. The sales price is SEK 36,000 and is reduced by the overhead amount that corresponds to the reported amount in the business, including VAT, ie SEK 34,500. The capital gain will be SEK 1,500.
We at Kryptoskatt.com strive for the information to be correct in all respects. However, we can not guarantee this, and therefore can not take any responsibility for any losses caused by incorrect information on this web service. However, we are grateful for all remarks about inaccuracies. If you have found something that seems wrong, feel free to send us a message at firstname.lastname@example.org.