Crypto Tax in Finland

Crypto adoption in Finland has grown steadily in recent years. By 2023, approximately 4% of Finnish households owned crypto assets, with their combined value estimated at €2.2 billion.

As more individuals and businesses invest in digital assets, understanding the tax implications of these holdings has become increasingly important.

The Finnish Tax Administration defines crypto assets as digital representations of value or rights that can be transferred and stored using distributed ledger technology or similar systems. This broad definition covers virtual currencies as well as other forms of crypto assets.

But how exactly are crypto assets taxed in Finland? This article explores the key tax rules, including taxable events, applicable tax rates, the FIFO method, loss deductions, and the impact of upcoming reporting requirements under the CARF.

‍How Crypto Is Taxed in Finland

Finnish tax authorities classify crypto as property, not currency with one exception for Stablecoins pegged to official currency.

However, an exception applies to certain Stablecoins that are closely pegged to fiat currencies, which may, in some cases, be treated similarly to currency for tax purposes, depending on their structure and regulatory classification.

The general principle is simple. Every disposal of crypto is a taxable event. This includes:

• Exchanging crypto for fiat
• Swapping crypto for another crypto
• Paying for goods or services. 

Therefore, the idea that one should pay taxes on crypto assets only when they are transferred into official currency is incorrect.

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Tax Rules for Individuals vs Businesses

Finland distinguishes between private individuals and companies. 

Crypto assets of companies may be taxed under the Business Income Tax Act (360/1968, EVL, elinkeinoverolaki), or potentially under the Agricultural Income Tax Act (543/1967, MVL, maatilatalouden verolaki). The Business Income Tax Act applies when trading qualifies as a professional activity.

This typically means it is:

• Continuous
• Systematic
• Active
• Profit-oriented
• Involves financial risk

Conversely, crypto assets of natural persons will be taxed as income for which the Income Tax Act (1535/1992, TVL, tuloverolaki) applies. 

Different types of crypto activity of natural persons are taxed in distinct ways. 

The following activities are generally treated as capital income:

• Selling crypto
• Trading crypto
• Paying for goods or services with crypto
• Locking up crypto
• Lending crypto

Conversely, crypto mining is treated differently from investing activities. It is generally taxed as earned income instead of capital income. 

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Non-Taxable Events

Two events that are not subject to taxation are:

A). Buying crypto with euros or other official currency

B). Transferring crypto between your own wallets.

Regardless, crypto purchases should still be documented for tax calculations.

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Tax Rates on Crypto in Finland

A). Capital Income Tax:

Capital income is taxed at 30% on profits up to 30,000 euros. If the profit exceeds this limit, the tax rate rises to 34%. Only if the total value of all sales, including exchanges, is less than 1,000 euros, will capital gains not be taxed. If the threshold is exceeded, the exemption no longer applies, and the entire gain becomes taxable.

Example:

If you bought 0.1 BTC in 2020, when the price was €20,000, your total investment would have been €2,000. If you later sold that 0.1 BTC in 2025 when the price had increased to €50,000, you would receive €5,000 from the sale. This means your capital gain would be €3,000.

Since this falls under the €30,000 threshold but above the €1,000 exception rate, the 30% tax rate applies. Hence, you would owe €900 in tax, leaving you with a net profit of €2,100 after tax.

B). Earned Income Tax (Mining):

Earned income is fully progressive, meaning the percentage rises as profits rise. As an example, profits of 30,000 euros are taxed at 18,9% and profits of 100,000 euros at 40,5%

C). Corporate Tax:

Companies taxed under the Business Income Tax Act are subject to a tax rate of 20%.

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‍Calculation of the Value of the Crypto Assets

Finland applies two different valuation methods for crypto taxed as a capital income:

A). The acquisition-cost rule

B). The deemed acquisition-cost rule.

The generally applicable method is the acquisition cost rule, which refers to the cost at the moment the asset was acquired. 

Hence, the moment the value is determined is when one receives the crypto asset, and the value of the crypto assets is based on the asset’s exchange rate against the euro. The amount of taxable profit received from the disposal of the crypto asset is calculated by deducting from the selling price the original value of the crypto asset and any related expenses incurred in obtaining the profit.

However, if the value is unknown, it will be determined on the basis of the deemed acquisition cost. The deemed acquisition cost is 20% of the selling price if one has owned the assets for less than 10 years, and 40% Of the assets have been owned for more than 10 years.

Every single transaction involving the use, sale or exchange of a crypto asset resulting in a gain or loss is treated as a separate event. Therefore, if the crypto assets have been acquired on multiple occasions, each occasion must be calculated separately.

Income from mining, which is taxed as earned income, will be taxed based on the value at the time the coins are received. 

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FIFO Principle

Finland applies the FIFO (First-In, First-Out) principle to crypto asset transactions. This principle means that the crypto assets are considered sold in the order in which they were acquired – taxpayers cannot choose which acquisition lot is disposed of first. This matters because if the value of the assets has fluctuated a lot over the years, the amount of taxes will differ significantly.

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Crypto Losses and Deduction Rules

Transactions involving crypto assets may also result in losses instead of gains. These are deductible for the following five years after the loss has occurred. Hence, if the taxpayer has no capital income during the year they incur the loss, it is carried forward to offset future gains. However, it must be noted that the deductions can be made only from the capital income, not from earned income.

Moreover, the deductions apply only if the crypto is actually sold or exchanged, not necessarily if they have become permanently inaccessible. This means that losses are not necessarily realised if, for example, a taxpayer loses access to wallet keys or a crypto exchange becomes bankrupt.

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Reporting Crypto Assets

Crypto assets can be reported either by including them in your annual tax return or by requesting prepayments during the tax year.

The latest point at which income and deductions must be reported is when filing the annual pre-completed tax return:

• For corporations, within four months after the end of the accounting period.
• For individuals, generally in April following the end of the tax year.

Crypto assets should be reported together with other assets on the tax return.

• Selling, exchanging, or spending crypto assets should be reported under "Capital Income – Capital Gains" by selecting the property type "Crypto Assets."
• Mining income should be reported under "Other Earned Income."
• Expenses related to mining should be reported under "Deductions – Expenses for the Production of Income – Expenses for the Production of Other Income."

Taxpayers must retain all receipts and other documentation relating to crypto-asset transactions for six years.

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Future of Crypto Tax Reporting in Finland

Yleisradio (Yle), the Finnish national public broadcasting company, wrote that 18,000 people reported income from the sale of crypto assets for the year 2024. This aggregated about 68 million euros in taxes in total.

However, this number is only approximately 10% of all people who have sold crypto assets in Finland, meaning that over 100,000 people have not reported their crypto asset transactions, although they should have done so. Crypto investors who fail to report taxable income may be subject to a tax surcharge, and cases involving large sums may result in the filing of a criminal complaint.

However, from the start of this year, crypto asset service providers have been required to collect information on service users, their purchases, sales and transfers of crypto assets. This information will be submitted in 2027.

This is linked to the Crypto Asset Reporting Framework (CARF), which almost 50 jurisdictions have already activated. This means that the Finnish Tax Administration will receive information from crypto exchanges and brokers in all those countries regarding their Finnish customers. Yle’s article estimated that up to 70,000 people may find information about their crypto asset capital gains included in their pre-filled tax returns.

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Conclusion

Almost every crypto asset transaction is subject to taxation in Finland. For natural persons, this means taxation based on capital or earned income. However, to this day, many people have not notified these transactions, although they should have done so. 

The introduction of CARF will ensure that more crypto investors are identified by the Finnish Tax Administration and required to pay taxes on their crypto-related income and gains. However, the scale of change in practice remains to be seen.

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