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How to Bulk Upload transactions on Kryptos
Are you among the many Swedish citizens involved in cryptocurrency transactions and unsure about the tax implications?
Don't worry, you're not alone!
Thousands of people are confused about how their crypto activities are taxed in Sweden and how this affects their tax obligations. That's why we've created a comprehensive guide to simplify the complexities of crypto taxation in Sweden for you.
Our guide covers every aspect of crypto taxation, including how to calculate your crypto taxes and report them easily. We'll also keep this guide up-to-date with the latest guidelines from the Skatteverket, so you don't miss out on any crucial updates. So let's dive in and demystify the world of crypto taxes in Sweden.
16/06/22 - Updated to accommodate ICO, gifts and donation taxes
16/06/22 - Updated to accommodate DAO taxes
According to Skatteverket, Bitcoin and other cryptocurrencies are classified as property rather than currency. Consequently, any sale or disposal of crypto assets in Sweden is subject to capital gains tax. It's important to note that the Skatteverket categorises bitcoin, altcoins, and other crypto assets as "other assets" under Chapter 52 of the Swedish Income Tax Act, which governs their taxation.
Apart from capital gains tax on crypto assets, it is also possible to be liable for additional taxes such as income tax/employment tax and interest income tax, depending on individual circumstances. Each situation is unique and may attract different taxes, which we will delve into further.
A flat tax rate of 30% applies to all gains made from crypto assets.
There are two types of Income Tax in Sweden:
National income applied to income above SEK 613,900, the municipal income tax varies based on the municipality you live in.
Consider the following transactions
2022/02/21 - Olivia bought 1 BTC for SEK 2,40,000
2022/03/11 - Olivia bought 1 BTC for SEK 2,50,000
2022/04/14 - Olivia bought 2 ETH for SEK 16,000 each
2022/04/21 - Olivia bought 1 ETH for SEK 18,000 each
2022/06/04 - Olivia sold 2 BTC for SEK 2,90,000 each
2022/08/18 - Olivia sold 3 ETH for SEK 20,000 each
2022/10/23 - Olivia receives 6.25 BTC as a mining reward
Now as seen in the above transactions, a total of 2 disposals were made, so let’s look at the gains incurred from each transaction.
2 BTC sold for SEK 2,90,000 each
Since the two BTC tokens were acquired at two different dates and prices, we are obligated to use a cost basis method to calculate the cost basis.
The Skatteverket recommends using the average cost basis method in Sweden. We have discussed it in more detail later. For now, just know that the average cost basis method considers the cost basis of an asset to be the average of its acquisition prices.
Let’s say there are two BTC tokens, BTC-1 was acquired for SEK 2,40,000
And BTC-2 was acquired for SEK 2,50,000
Now the average cost base = (2,40,000 + 2,50,000)/2 = SEK 2,45,000
Disposal Amount = SEK 2,90,000
Capital Gain = Disposal Amount - Cost Basis = 2,90,000 - 2,45,000 = SEK 5,000(from 1 BTC)
Gain from both disposals = 2*5,000 = SEK 10,000
3 ETH sold for SEK 20,000 each
ETH-1 acquisition cost = SEK 16,000
ETH-2 acquisition cost = SEK 16,000
ETH-3 acquisition cost = SEK 18,000
Avg. Cost Base = (16,000 + 16,000 + 18,000)/3 = SEK 16,666.67
Disposal Amount = SEK 20,000
Capital Gain from 1 ETH disposal = 20,000 - 16,666.67 = SEK 3333.33
Gain from 3 ETH disposals = 3*3,333.33 = SEK 9,999.99
Collective gain from both disposals = SEK (10,000 + 9,999.99) = SEK 19,999.99
This capital gain will attract a blanket tax rate of 30%.
As for the mining rewards received on 2022/10/23, the gains will be treated as income and will attract income tax.
Yes, Skatteverket can access your records from cryptocurrency exchanges, including your holdings, transaction history, and withdrawal addresses due to strict regulation and the availability of data on public blockchains.
Most exchanges require users to complete a 'Know-Your-Customer' (KYC) application before purchasing cryptocurrencies. Thus, if you have signed up for any exchange that requires this check, Skatteverket is likely to have your record.
Moreover, the European Union's stricter regulations regarding customer identification mean that data is shared between EU member states. This directive has made it easier for financial authorities like Skatteverket to gain access to data on cryptocurrency owners.
As discussed earlier, cryptocurrencies fall under the category of "Other Assets" defined in Chapter 52 of the Swedish Income Tax Act. As a result, if you’re selling Bitcoin or other cryptocurrencies it is subject to capital gains reporting requirements. However, numerous complex scenarios may require capital gains tax calculations, the fundamental expectation is that you, who hold cryptocurrencies, have to declare and pay capital gains taxes.
The following scenarios are subject to capital gain tax:
If you are a Swedish resident and have earned capital gains from cryptocurrencies, you are subject to the same tax rate of 30% that applies to other types of assets such as bank savings, equities, dividends, and real estate. This means that the tax rate for cryptocurrency capital gains is not different from that of other capital gains in Sweden.
You have to use the “Average Cost Basis Method”, or Genomsnittsmetoden while calculating capital gains tax. To accurately calculate your cryptocurrency gains tax, it is essential to establish your "Cost Basis" or Omkostnadsbelopp. Typically, the cost basis is the average price at which the cryptocurrency was purchased which is mostly expressed in Krona(SEK).
While calculating your profit or loss, subtract your cost basis from the disposal amount of the asset. If you have made a profit, you will be required to pay a 30% tax on the gain, while if you have made a loss, you may deduct 70% of the loss.
A simple way to calculate taxable excess capital (your taxable gains) is to add all transactions with a gain together and all transactions with losses together and then finally deduct 70% of your losses from your gains to get the taxable base.
Here’s an example:
Let’s say Erik makes a total gain of 100,000 SEK in a tax year and a loss of 100,000 SEK as well. Now since only 70% of the loss is deductible, you can deduct 70,000 SEK from your 100,000 SEK gain and the excess capital comes out to be 30,000 SEK and at a 30% tax rate, your tax liability comes out to be 9,000 SEK.
If your losses far exceed your gains, you can claim a tax reduction and get a refund from Skatteverket. If a taxpayer's capital deficit does not exceed 100,000 SEK, they receive a 30 per cent tax reduction. However, if the deficit is greater than 100,000 SEK, the tax reduction consists of 30,000 SEK (30 per cent of 1,00,000 SEK) plus 21 per cent of the amount by which the deficit exceeds 100,000 SEK.
Consider this example:
Erik bought 4 Bitcoin for 500,000 SEK in year 1. In year 3 Erik sells 4 bitcoin for 250,000 SEK. The capital loss is 150,000 SEK and 70 per cent of the loss is deductible, 105,000 SEK. Erik has no other incomes or expenditures in capital and the total capital deficit is therefore 105,000 SEK. The tax reduction is 30 per cent of 100,000 SEK (30,000 SEK) plus 21 per cent of 5,000 SEK (1,050 SEK), in total 31,050 SEK.
You can offset 70% of any capital losses you incur during a tax year against your capital gains and claim a tax deduction for the remaining losses. However, to take advantage of this tax deduction, you should actively track and record your losses.
Keeping accurate records of all your cryptocurrency transactions, including the purchase date, cost basis, and other relevant details is essential when calculating your capital gains and losses for tax purposes. If you maintain detailed records, you can claim your tax deductions and offset your capital losses against your capital gains, thereby minimising your tax liability.
Sometimes investors make fictitious losses by closing a position at a loss and immediately purchasing the same assets again, feeding wrong information to the market. This practice is called Wash Trading and some countries like the UK even have a 30-day rule against it to prevent investors from doing so. There are no existing guidelines against wash trading in Sweden, so we decided to reach out to Skatteverket to better understand how such actions are viewed by them and here’s what they had to say about it:
“In Sweden, there is no equivalent to the 30-day rule that you mention in your email. The disposal of the asset however needs to be final and a real transfer of ownership has to take place. Selling an asset on the open market, for example on a trading platform, is usually regarded as a disposal. But if you sell the asset outside of a trading platform, especially to close relatives, the circumstances are different and if it is a disposal or not would have to be determined on a case-by-case basis. In that assessment, the time aspect is just one part. An agreement between buyer and seller, the transfer of the assets, that the price paid is based on market value, that the payment transaction took place, and how regularly the asset is traded are examples of other aspects of the disposal that might be considered.”
If you've experienced unfortunate events like losing your private keys, having your funds stolen, or facing losses from a collapsed exchange, you may be wondering if you can offset these losses against your capital gains. Unfortunately, Skatteverket has provided guidance on this matter, and the news isn't favorable.
According to the guidelines issued by Skatteverket , if you've lost access to your crypto due to a lost private key or a hacking incident, you cannot claim deductions for the resulting losses. Moreover, if you still own multiple assets of the same kind and haven't disposed of them or lost access to them, your cost basis remains the same.
Skatteverket has also offered specific instructions for individuals who lent assets through Celsius or suffered a from the FTX collapse. For FTX users, if your disposals on the platform led to capital gains or losses, you must report both in your tax return. However, to claim your losses, you need to make an open claim in the other information section of your tax return. It's important to note that this only applies to losses incurred prior to the collapse of FTX, not for funds frozen on the platform. To claim losses from frozen funds, you'll likely have to wait for the conclusion of bankruptcy proceedings to assess your situation.
For Celsius users who lost crypto by lending it on the platform, the situation is a bit more complicated. According to Skatteverket, when you lent crypto, it was considered a disposal of the assets at the moment of transfer to Celsius. Therefore, individuals who lent their crypto assets to Celsius are deemed to have disposed of the assets and must perform a capital gain calculation in their Income Tax Return. Instead of holding the crypto assets, they now possess a claim against Celsius.
To deduct a loss on a claim related to Celsius, it is necessary, among other requirements, for the claim to have been disposed of. A claim is considered disposed of if the issuing company has been declared bankrupt and is a limited company or a cooperative association. Since Celsius is currently undergoing corporate restructuring under Chapter 11, the claim cannot be regarded as disposed of due to bankruptcy.
Despite crypto being a taxable asset in Sweden, some transactions are exempt from taxation:
In Sweden, gifting and inheritance of crypto assets are tax-free. This means you can give away crypto without any tax obligations. However, it's important to note that gifted assets cannot be deducted from your profits.
If you receive crypto as a gift, you are not required to pay taxes on it until you decide to sell it. It is advisable to request the purchase receipt from the gfter, it can serve as your cost basis. Having the original purchase price as your cost basis can help reduce your tax liabilities when you eventually sell the gifted crypto.
In Sweden, donating cryptocurrency is considered equivalent to giving a gift and is exempt from taxes. But unlike certain countries where donating cryptocurrency can be tax deductible, this is not the case in Sweden. For a gift to be eligible for a tax deduction in Sweden, it must be in the form of a traditional currency and given to a recognized charitable organization. The Swedish Tax Agency does not classify cryptocurrency as a currency for tax purposes, and therefore it does not qualify for tax deductions when donated.
You can deduct 70% of your losses from your tax base and lower your taxable income in Sweden. This method is called tax-loss harvesting and is often relied on by investors across the globe to lower their tax bill.
If you have received cryptocurrency as compensation for your labour or services, you are required to pay standard income taxes on it, just as you would if you were paid in your local currency.
If you choose to hold onto the cryptocurrency you received, any profits or losses that occur when you sell it will be subject to capital gains taxes. The cost basis for this purpose will be equivalent to the amount you reported on your income tax return.
Now there are ways you can earn crypto income, but you must pay income tax on it.
In Sweden, the income tax system comprises two types of taxes:
The national income tax applies if your income exceeds SEK 613,900 for the 2023 tax year.
On the other hand, the municipal income tax rate varies depending on the municipality you reside in. The municipal income tax rate is determined by the municipality's tax rate, which can differ from one municipality to another.
Calculating your crypto income is a simple process. All you need to do is add the FMV of the assets received through multiple avenues. As mentioned earlier, assets received as mining rewards, salary, or compensation for voluntary participation are counted as income.
Let’s consider the following transactions:
2022/01/13 - Astrid received 6.25 BTC as mining rewards (FMV - SEK 1,50,000 each)
2022/02/14 - Astrid received 2 ETH as compensation for her services (FMV - SEK 17,000)
2022/03/15 - Astrid received 1 ETH from a DAO referral program (FMV - SEK 18,000)
To calculate the crypto income for the tax year, Astrid just needs to add the value of the assets received from these three transactions.
Total Income = SEK (6.25*1,50,000 + 2*17,000 + 1*18,000) = SEK 9,89,500
This is Astrid’s taxable income base.
If you have received cryptocurrency as loan interest or staking rewards, you will be subject to interest income tax, also known as "Ränteinkomst".
Interest Income is taxed at a flat rate of 30%.
In Sweden, interest income from loan interest and staking rewards are subject to a flat rate tax of 30%. The key difference between interest income tax and capital gains tax is that any losses incurred from interest payments you have made are fully deductible.
To calculate your interest income tax, you will need to sum up the total income you have received from your loan interest and staking rewards activities. This total amount will be subject to the flat rate of 30% tax.
The following transactions are tax-free in Sweden:
Following are transactions that attract tax liabilities in Sweden:
Skatteverket states that if you engage in mining as an individual, the earnings are classified as income from a hobby. Consequently, it is necessary to declare and pay Income Tax on your mining proceeds.
To determine the income tax amount owed on your mining earnings, you should calculate the value of the proceeds in your local currency on the day of receipt. The cost basis for the newly acquired coins is equivalent to the amount you declared as income.
However, if you choose to sell the cryptocurrency you have mined in the future, any gains incurred would be subject to regular capital gains taxes on any resulting profits or losses. This implies that if the value of the cryptocurrency has appreciated since the day of mining, you will owe capital gains taxes on the difference in value.
Skatteverket recently stated ETH staking, providing clarification that staking crypto typically does not incur tax liabilities in most cases. However, it is important to note that taking on different protocols can have varying tax implications.
Based on our understanding of the existing guidelines, staking itself is not considered a taxable event as long as you have not transferred the rights to use your crypto to another party. However, if you have transferred these rights for the staking period, the transaction will be treated as a disposal and taxed accordingly.
When you engage in staking and receive rewards, they are usually paid out in the form of the cryptocurrency associated with the blockchain you are staking. The value of the cryptocurrency received as a reward is determined based on the exchange rate to the local currency on the day you gain access to them. If you decide to hold onto the cryptocurrency and sell it in the future, any resulting capital gains will be subject to regular capital gains taxes.
In Sweden, crypto margin trading and futures are treated as crypto gains and are subject to capital gains tax when the position is closed. If you make a profit, the cost basis of the profit is applied after paying the capital gains taxes. If you incur a loss, it's equivalent to selling the coins at 0 SEK, and the loss is calculated based on the average cost basis of the coins.
The tax implications of NFTs vary depending on the circumstance. If you have bought or sold an NFT, it is treated similarly to any other cryptocurrency and you have to pay capital gain. However, if you create NFTs to sell them for profit, you may be subject to income tax. Moreover, you need to determine whether this activity constitutes a hobby or a business.
Regardless of your involvement with NFTs, it's advisable to include a statement in your tax filing that clarifies how you handled NFT taxes. This statement, known as "Öppet Yrkande", can reduce the likelihood of incurring a tax surcharge due to errors.
ICOs are special events that allow you to invest in new projects and get access to project-native tokens in exchange for mainstream tokens like BTC and ETH. It is similar to IPOs in traditional securities markets. ICOs are treated as simple crypto-to-crypto trades from a tax perspective. The tokens you send to the project are counted as disposal and attract capital gains tax. While the tokens you receive inherit the cost base equal to the disposal amount, to be taxed at a later date when you dispose of these assets.
Specific guidance from Skatteverket regarding assets received from DAOs as compensation or for completing bounties is currently unavailable. However, based on our inference, income from DAOs would likely be subject to taxation in the same manner as other tokens received as salary or compensation for providing products or services.
It is essential to declare any assets obtained from DAOs as income and fulfil the corresponding income tax obligations. Nonetheless, we highly recommend seeking advice from a knowledgeable tax professional for a more comprehensive understanding of the matter.
While the Skatteverket has not issued explicit guidelines for DeFi taxation, it is crucial to recognize that engaging in DeFi activities does not exempt you from tax obligations. Whether you are involved in selling, swapping, utilising cryptocurrency, or receiving coins or tokens as income within the realm of DeFi, it is important to be aware that these activities are subject to taxation.
Given below are some DeFi transactions that attract tax liabilities in Sweden:
In Sweden, gifting and donating cryptocurrency are exempt from taxation. You can send and receive crypto without incurring any tax liabilities. However, when you choose to dispose of the gifted crypto by selling or swapping it, you will be subject to capital gains tax. To reduce the tax burden, you can inherit the cost basis from the original gifter by obtaining a purchase receipt from them. This allows you to pay a lower capital gains tax when selling or swapping those assets.
Donating crypto to any registered organisation is tax-free in Sweden.
Airdrops and forks are generally considered "gifts" from token holders, thus not subject to immediate tax obligations. However, taxes are applicable when you sell these assets, and it is recommended to establish a cost basis of zero in such cases.
If an airdrop is received as compensation for a specific service, such as referring individuals, it may be classified as taxable income. While the Skattverket does not explicitly address the taxation of cryptocurrency hard forks, they are likely treated similarly to staking rewards.
In Sweden, the tax year runs from January 1st to December 31st. You should include your crypto taxes in your annual tax return and your employment income.
For the 2022 tax year, the deadline for filing your tax return is May 2, 2023. Be aware that failing to file your tax return by the deadline may result in pen salties and additional charges. It is advisable to submit your tax return well before the deadline to avoid any such penalties.
These are the general crypto records that need to be reported to Skatteverket:
Once you’ve calculated the cryptocurrency taxes you can file capital gains tax, employment tax, and interest income taxes online mode or via mail.
Let’s understand all these taxes one by one.
There are three methods to submit your capital gains taxes:
“K4 Tax Form is where all profit and loss need to be addressed. Moreover, you need to keep in mind the gains and losses which must be reported separately.”
Submitting employment income tax depends on the type of income you’ve received. The following are the steps to report various types of income:
Your employer should have already declared this income, but if they failed to do so, you can manually report it by visiting the Ändra section (under section D) of the K4 form and entering the value of income you received.
To report income from rewards or mining, you need to fill out a T2 form. You can find the form in the online portal by going to Bilagor > Inkomst av hobby, internetinkomster m.m. (T2).
Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:
If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.
There’s no legal way to avoid crypto taxes in Sweden entirely. However, there are strategies you can use to lower your tax bill.
1. Is crypto legal in Sweden?
Yes, crypto is legal in Sweden and is categorised as an “others asset” instead of a currency by the Skattverket (Swedish Taxation Office) and taxed accordingly.
2. What are the non-taxable crypto transactions in Sweden?
Here are the few non-taxable crypto transactions in Sweden that we haven’t discussed earlier.
Purchasing crypto doesn't incur any taxes, but it's essential to maintain a record of the price paid for it to include in your average cost basis or "Omkostnadsbelopp". If you've bought the crypto in a foreign currency such as USD or EUR, convert it to the local currency's value on the date of purchase. This is necessary for accurately calculating any future taxes you might incur upon selling the crypto.
Transferring crypto between your wallets and exchanges is not subject to taxes. Only the transaction fee is taxable.
When you gift someone crypto, it's not taxable. However, you can't subtract it from your profits, similar to lost or stolen crypto. Receiving crypto as a gift is also non-taxable until you decide to sell it. In this case, the cost basis you should use is the price at which the person who gifted you the crypto originally purchased it.
Donating crypto is also non-taxable, but unlike in some other countries, it's not tax-deductible in Sweden. For a donation to qualify for a tax deduction, it must be given in the form of currency, which Skatteverket does not consider crypto to be.
3. What happens if I don’t report my Crypto taxes?
If you don’t report your crypto taxes accurately or provide incorrect information to the Swedish Tax Authorities, you may end up paying penalties of up to 40% of the evaded taxes in addition to the regular tax rate, depending on the situation and periodic severe cases, you could even face criminal prosecution and up to 6 years in prison. The Skatteverket considers tax evasion a grave offence and may have access to data on individuals who have undergone KYC checks on centralised exchanges. Therefore, you must apply the correct tax treatment to your crypto transactions and file taxes correctly.
4. How is staking taxed in Sweden?
Staking rewards earned from cryptocurrency holdings are subject to interest income taxes in Sweden. Typically, staking rewards are paid in the same cryptocurrency as the one you are staking towards. The cryptocurrency received will have a cost basis equal to the local currency value on the day you gain access to the staking rewards. If you hold the crypto and sell it later, regular capital gains taxes will apply.
5. Can I claim tax benefits in Sweden if Celsius goes bankrupt?
Celsius is currently undergoing a corporate restructuring process through Chapter 11, which means that any outstanding receivables cannot be regarded as disposed of due to the ongoing bankruptcy proceedings. If Celsius is ultimately declared bankrupt, the Swedish tax authority Skatteverket will evaluate whether your claim of disposal is valid.
To claim tax deductions for losses on your Celsius claim, it is currently necessary to sell or dispose of it. However, to ensure that your claim is considered disposed of, it must be sold in a manner that is not considered a gift or transferred below market value. Otherwise, such transactions will not be considered as disposal of the asset. Therefore, it is important to take appropriate action and sell your claim at market value to qualify for any tax benefits.