According to the trader, Linus Dunker, the tax bill is “unreasonable,” claiming that he is being charged 300 percent of his total gains.
Dunker’s situation is not unique. The STA has taken up several similar cases, it has been reported, with bitcoin traders receiving tax bills for millions of Swedish kronor since last year.
Even since cryptocurrency trading became popular in Sweden, the STA has been increasingly investigating and prosecuting cryptocurrency-related cases. In 2018, the agency investigated up to 400 Swedish crypto traders, a tenfold increase from the prior year.
Cryptocurrency Trader’s ‘Unrecognised Activities’ Revealed
According to STA control coordinator, Henrik Kisterud, the investigations have brought to light numerous “unrecognised activities.” from the Swedish cryptocurrency trader. As a result, Kisterud anticipates additional resources being allocated to cryptocurrency investigations.
According to Dunker, he traded around SEK 25 million or $2.75 million worth of Bitcoin and made a moderate profit. Now, he claims, the tax agency is taxing Dunker more than they should because he did not deduct the price of his initial bitcoin purchase, which was paid in cash. The STA has reportedly said that, legally, this would increase Dunker’s tax burden.
The Swedish Cryptocurrency trader also claims that his country’s tax laws were unclear on how to categorise cryptocurrencies in 2014 trading and that he thought they qualified as a “hobby activity.” It wasn’t until 2016 that the tax agency reached out and instructed him to report his cryptocurrency gains as capital income.
The Trader Was Taxed 300% Of His Cryptocurrency Gains
Dunker subsequently reported his cryptocurrency profits as capital gains. However, since he was still unaware of how to report each trade, he included a note with his tax return agreeing to correct any mistakes. According to Dunker, he received no response until 2018 when he was audited and taxed at a rate of roughly 300 percent instead of the normal 30 percent he had expected.
Furthermore, Dunker has also raised concerns over the fact that the STA has categorized his cryptocurrency trades as business activities rather than personal investments. Because of this classification, Dunker claims, he must now pay more than the normal 30% tax for personal capital gains.
According to Dunker, the STA is trying to set a precedent, one that could potentially affect many other Swedish cryptocurrency traders.
Dunker plans to take out loans and sell some shares of his company to pay off his tax debt before the deadline on January 28, 2019. He also wants to pursue legal action and intends to seek help from the public and the cryptocurrency community.