Taxes

How is crypto taxed?

The Supreme Administrative Court (Högsta förvaltningsdomstolen) has ruled that cryptocurrencies should not be treated as foreign currency or securities when it comes to taxation. Instead, they should be seen as other assets according to the Swedish Income Tax Act.

You therefore need to declare transactions with cryptocurrencies if you:

1. Sell cryptocurrency
2. Exchange one cryptocurrency for another
3. Pay with cryptocurrency for goods or services
4. Lend cryptocurrency
5. Use cryptocurrency as a stake in gambling

All these transactions results in either a capital gain or capital loss that should be reported on Form K4 in connection with your income declaration.

Calculate profit/loss - Acquisition cost

To calculate your profit or loss, you need to know your acquisition cost. The acquisition cost is always stated in Swedish kronor. How you calculate the acquisition cost depends on whether the cryptocurrency was acquired through:

1. Purchase: The acquisition cost is the price you paid for the cryptocurrency.
2. Mining: The acquisition cost is the market value of the cryptocurrency when it was allocated to you.
3. Payment in private business: The acquisition cost is the value reported as turnover, including VAT.
4. Salary: The acquisition cost is the value reported as income from employment.
5. Gift: The acquisition cost is taken over from the giver.

Remember that you need to be able to show receipts and account statements to prove the acquisition cost. If you cannot prove any acquisition cost, you can set it to 0, but this means that the entire disposed value is considered a profit, which leads to a higher tax burden.

Calculate profit/loss - Acquisition cost

To calculate your profit or loss, do the following:

Value of what has been sold - Acquisition cost of what has been liquidated = profit or loss

If you have made a profit, you pay 30% tax on the entire profit. If you have made a loss, you can deduct 70% of the loss. You therefore declare profits and losses separately for each cryptocurrency in the K4 form. The Tax Agency will then deduct losses for you.

How to fill in the declaration?

The process usually looks something like this:

1. Download transactions from previous years: Retrieve all transactions from your exchange accounts and wallets, not just the past year. This is important because your acquisition costs are calculated based on all your previous transactions.
2. Determine market value: If you have exchanged between different cryptocurrencies, determine the value of these currencies in Swedish kronor at the time of each exchange. This is needed to accurately calculate capital gains/losses and acquisition costs.
3. Calculate acquisition costs: Calculate your acquisition costs for the cryptocurrencies you have liquidated in the year to be declared.
4. Calculate capital gains/losses: Based on acquisition costs and information on disposals that occurred during the year, you can calculate capital gains and capital losses.
5. Fill in the K4 form: Report your capital gains and capital losses for each cryptocurrency by filling in these on the K4 form under section D.

If you want to save time and have many transactions, consider using a crypto tax service. BTCX has a unique collaboration with the largest of these services, and all our customers get up to a 30% discount. Go to 'Do your taxes easily with our partners' section for more information. These services can help by automating several of the steps above and can produce a downloadable K4 form to send to the Tax Agency.

Submitting the declaration

Declare most easily via the Tax Agency's e-service for income declaration in Appendix K4 section D; you can also use the paper form. On the K4 form, you report your profits and losses separately for each cryptocurrency you have disposed of during the year.

When using the e-service, you should report cryptocurrencies in whole numbers. For example, if you have sold 0.7 bitcoin, write 1 bitcoin. In the "Other information" section of your declaration, you then specify the exact number you sold, i.e., 0.7 bitcoin. If you use the paper form, you can specify amounts with decimals on the K4 form.