Finnish Tax Authority Uncovers €30 Million in Undeclared Crypto Profits

News | May 3, 2024 By:

On Monday, April 22, 2024, the Finnish Tax Administration announced that Finnish taxpayers made at least €30 million ($32 million) in undeclared cryptocurrency trade profits in 2022. According to the tax authority, those who invested in cryptocurrencies such as Bitcoin were assessed €10 million in unpaid capital gains taxes as a result of tax audits.

The Finnish Tax Administration reminded taxpayers to include any cryptocurrency profits in their upcoming tax filings by next month’s deadlines. Capital gains from the sale of cryptocurrencies like Bitcoin are subject to capital gains taxes, while income from cryptocurrency mining is taxed as regular income. Taxpayers can also claim deductions for acquisition costs of virtual currencies and losses from selling cryptocurrencies.

By taking advantage of international data exchanges, the tax administration was able to discover many previously undeclared cryptocurrency profits during the audit process. In the future, tracing cryptocurrency transactions will become even easier through frameworks such as the OECD’s cryptocurrency reporting framework known as CARF and the EU’s DAC8 directive, which expands mandatory information exchanges between countries.

The large amount of uncovered cryptocurrency trade profits demonstrates that the tax audit system is working effectively, according to Mika Siivonen, a tax expert at the Finnish Tax Administration. The reminders aim to help taxpayers properly include cryptocurrency gains in their upcoming tax filings.