A record number of taxpayers in Finland reported crypto income to tax authorities this year, but as many as 100,000 neglected to declare their virtual currency income last year.
Starting at the beginning of next year, the Finnish Tax Administration will increasingly track transactions of Bitcoin and other cryptocurrencies.
The uptick in monitoring of the asset transfers will be a major change, as a very large proportion of cryptocurrency sales are not currently being reported to the tax office.
According to Tax Administration figures seen by Yle, around 18,000 people have this year declared cryptocurrency sale income for transactions made in 2024.
The roughly 225 million euros in capital gains from those transactions resulted in about 68 million euros in paid income taxes in 2024.
This year has seen an historic large number of crypto transactions.
Currently only about 10 percent of cryptocurrency sales get reported to the Tax Administration, according to the agency’s senior advisor, Juho Hasa.
He said that the proportion has remained about the same in recent years, noting that the situation is similar in other Nordic countries.
According to the estimates by the Tax Administration and the Finance Ministry, around 450,000 taxpayers in Finland hold some form of cryptocurrency.
There is no law on the books that makes reporting cryptocurrency ownership obligatory, but profits from their sale must be declared.
According to Hasa, around 100,000 people in Finland failed to declare such income last year.
However, the tax office does not solely rely on information provided by taxpayers, as it can also request information about people’s cryptocurrency transactions from virtual currency service providers operating in Finland, as well as abroad.
People who get caught through such requests usually face higher tax rates. If it is a question of large sums, the Tax Administration may also file a criminal report.
The agency has filed around 200 criminal reports over suspected tax evasion over the past three years. According to Hasa, the number of reports being filed is growing at a rapid pace.
When the new regulations come into effect at the beginning of next year, it will become easier for authorities to track profits from virtual currency transactions, as the Crypto-Asset Reporting Framework (Carf) is implemented.
Carf is a set of international rules created by the Organisation for Economic Co-operation and Development (OECD). It will enable the collection of information about holders of cryptocurrencies (including Bitcoin and Ethereum and many others), for use by tax authorities.
In practice, the cryptocurrency platforms will ask users for personal information, like their name and address, to keep a record of their transactions. The providers will then be obliged to send the information to tax authorities, which will then be able to share the data with authorities in other countries. The agreement covers 70 countries.
However, the tax office cannot use that information exclusively as they calculate capital gains and losses directly from domestic crypto companies.
Some holders may be a bit surprised to see their income tax forms pre-filled with virtual currency transaction figures, according to Hasa.
He said that up to 70,000 people in Finland may get such a surprise after the agency starts using the framework.
The new rules come into effect in January, but their impact will be first seen in the autumn of 2027, when the tax returns of 2026 are completed.
Hasa said the arrangement will increase the amount of cryptocurrency profit reporting.
The amount of taxes collected will also likely increase, but it is not possible to say by how much, due to the major fluctuations in value of virtual assets, Hasa explained.
