Denmark Tax Agency Clarifies Taxation of Cryptocurrency Upgrades

The Danish Customs and Tax Administration Nov. 6 posted online National Tax Court Decision No. SKM2025.623.LSR, clarifying the taxation of cryptocurrency upgrades. The taxpayer, a holder of Kyber Network Crystal (KNC) tokens on the Bitstamp exchange, received upgraded tokens automatically following changes to the underlying smart contract. The taxpayer sought clarification on whether the upgrade of the KNC cryptocurrency balance on the exchange should be considered a taxable realization despite no trade being made. The taxpayer argued that the upgrade shouldn’t be considered a taxable realization, and the Tax Council disagreed, contending that the token upgrade was a taxable realization. ...