Denmark Crypto Interest & Lending Tax Guide (SKAT Rules)

Crypto Interest as Personal Income

Under Danish tax law, when you deposit cryptocurrency into an interest-bearing account — whether on a centralised exchange (e.g., Binance Earn, Kraken Staking), a CeFi lender (e.g., Nexo, YouHodler), or a DeFi protocol (e.g., Aave, Compound, Morpho) — the interest or yield you receive is treated as personal income, not as capital income. This distinction is critical because personal income is taxed at progressive rates up to approximately 53% (including municipal tax, state tax, and top-bracket tax, but excluding AM-bidrag on the gain itself), while capital income is taxed at a flat rate of approximately 37–42%. The legal basis is that the interest is compensation for lending your crypto — analogous to bank interest — and falls within the general income tax provisions rather than the capital gains or financial contract rules.

Timing of taxation: The interest is taxable at the moment it is credited to your account and becomes available to you. "Available" means you can freely withdraw, trade, or otherwise dispose of the interest. If the interest is locked for a period (e.g., locked staking with a 7-day unbonding period), it is taxable when it becomes unlocked and available. If the interest is paid in a different cryptocurrency from your deposit (e.g., you deposit ETH and receive interest in the platform's native token), the interest is still taxable as personal income at the market value of the interest on the credit date. You must convert the value to DKK using the exchange rate on that date. The interest is not subject to AM-bidrag (the 8% labour market contribution), because it is not employment income. However, it is subject to the standard progressive personal income tax rates.

Example — CeFi lending interest: Laura deposits 50,000 USDC on Nexo at 8% APY. On 1 March 2026, she receives 333 USDC in interest (approximately one month's interest). On that date, 1 USDC = 1 USD, and the USD/DKK rate is 6.90. The interest value is 333 x 6.90 = 2,298 DKK. Laura must report 2,298 DKK in box 20 as personal income. She pays tax at her marginal rate — if she is in the 42% bracket plus municipal tax, her effective rate is approximately 42%, so she owes roughly 965 DKK in tax on this interest. She still holds the 333 USDC in her Nexo account. If she later sells those USDC for fiat (or trades them for another crypto), that sale is a separate taxable event under the standard speculative rules.

Subsequent Disposal of Interest Crypto

After you have received and paid tax on crypto interest, the interest tokens become part of your overall holdings of that cryptocurrency. When you later sell or dispose of them, you must calculate the gain or loss under the standard speculative income rules using the FIFO principle (First In, First Out). The cost basis of the interest tokens is the DKK value on the date they were credited to your account — the same amount you reported as income in box 20. This means you have effectively stepped up the basis to the market value at receipt. Any subsequent appreciation or depreciation from that point is treated as a speculative gain or loss when you dispose of the tokens.

Example — subsequent disposal: Continuing from the example above, Laura holds the 333 USDC she received as interest (cost basis 2,298 DKK, or 6.90 per USDC). Six months later, the USD/DKK rate has risen to 7.20, and she decides to sell the 333 USDC on an exchange. The proceeds are 333 x 7.20 = 2,398 DKK. Her gain is 2,398 - 2,298 = 100 DKK. She reports this gain in box 20 as personal income (speculative gain). Note that she was already taxed on the 2,298 DKK when she received the interest — the additional 100 DKK gain on disposal is taxed separately. If the USD/DKK rate had fallen to 6.60 instead, the proceeds would be 333 x 6.60 = 2,198 DKK, resulting in a loss of 100 DKK, which she could report in box 58 (speculative loss deductible at approximately 26%).

FIFO interaction with interest: If Laura already held 10,000 USDC before receiving the interest, the interest tokens are treated as new acquisitions. Under FIFO, when she sells USDC, the earliest acquired units are sold first. If her original 10,000 USDC were acquired at a lower average cost than the interest tokens, the earliest units may produce a larger gain or smaller loss. The interest tokens, being later acquisitions, will generally be sold after the earlier purchases under FIFO (unless she had other intervening purchases). You cannot specifically identify the interest tokens as the ones being sold to minimise tax — FIFO determines the order. Maintain a running FIFO log for each cryptocurrency that includes both purchased units and interest receipts, with their respective acquisition dates and cost bases.

DeFi Lending and Yield Farming

DeFi lending and yield farming introduce additional complexity because the interest may be paid in multiple forms: the base interest in the deposited asset, bonus rewards in the protocol's governance token, and potentially additional fees or MEV (maximal extractable value) distributions. Under Danish tax rules, each type of return is analysed separately. The base interest (e.g., receiving more USDC for depositing USDC) is personal income at the time it accrues and becomes available. The governance token rewards (e.g., receiving COMP for depositing on Compound, or AAVE for depositing on Aave) are also personal income at receipt but may be subject to different valuation considerations, especially if the tokens are illiquid or subject to vesting schedules. If rewards are locked (vested), they are taxable when they become unlocked and available — not at the grant date.

Example — DeFi yield farming: Tobias deposits 10 ETH into a Curve liquidity pool and receives LP tokens representing his share. Over three months, he earns trading fees and CRV rewards totalling 0.5 ETH in value (2,500 USD, or approximately 17,250 DKK at USD/DKK 6.90). The 17,250 DKK is personal income in box 20 in the tax year when received. Tobias must also track the LP tokens themselves — depositing into the pool is not a taxable event (it is a transfer), but withdrawing from the pool is taxable if the value of the withdrawn assets differs from the deposited value. The withdrawal may trigger a gain or loss on the ETH portion, calculated under the speculative income rules. Additionally, any CRV rewards that Tobias later sells are subject to the subsequent disposal rules described above: the CRV has a cost basis equal to the DKK value at receipt, and future gains/losses are speculative income.

LP token taxation: Liquidity provider (LP) tokens occupy a grey area in Danish tax law. Depositing assets into a liquidity pool is generally not a taxable event — you are retaining economic exposure to the underlying assets. However, withdrawing from the pool (or the pool being drained by a hack) may be taxable. The challenge is tracking the cost basis of LP tokens, which change in value as trading fees accrue and as the underlying asset ratio shifts due to trading activity (impermanent loss). SKAT has not issued specific guidance on LP token taxation, so the conservative approach is to treat each deposit as a non-taxable transfer, each withdrawal as a disposal (with gain/loss calculated as the difference between the value withdrawn and the value deposited, adjusted for any fees earned), and any reward tokens as personal income at receipt. Taxpayers engaged in significant DeFi activity should request a binding ruling. See our staking and mining guide → for related rules.

Staking Rewards

Staking — validating transactions on a proof-of-stake blockchain by locking up cryptocurrency — generates rewards that are taxed similarly to lending interest. When you stake crypto (e.g., ETH on Ethereum 2.0, ADA on Cardano, DOT on Polkadot, SOL on Solana), the staking rewards you receive are taxable as personal income in box 20 at the time they are credited to your account and become available. The taxable value is the market value in DKK on the credit date. If the rewards are auto-compounded (restaked automatically), each compounding event is a separate taxable receipt. This creates a significant tracking burden for long-term stakers — every epoch or era in which rewards are distributed may be a separate taxable event. For Ethereum stakers using Lido (stETH) or Rocket Pool (rETH), the liquid staking derivative accumulates value continuously rather than distributing rewards periodically. The taxation of liquid staking derivatives is more complex and may involve either annual mark-to-market or income recognition at disposal. SKAT has not issued definitive guidance on liquid staking tokens. Taxpayers using liquid staking derivatives should consult a tax professional.

Example — ETH staking rewards: Sofie stakes 32 ETH on Ethereum 2.0 through a solo staking setup. She receives rewards every epoch (approximately every 6.4 minutes). Over the course of a year, her total rewards are 1.5 ETH. The rewards are credited in many small increments throughout the year. For tax purposes, Sofie must calculate the DKK value of each reward at the time it was credited — this is computationally intensive. Many Danish crypto taxpayers use specialised software (Koinly, CoinTracking, Skatteguiden) that can import staking reward data and calculate the DKK values automatically. The total rewards across all credits (say, 1.5 ETH with an average value of 7,000 DKK per ETH = 10,500 DKK) are reported in box 20. The cost basis of each reward unit is its DKK value at receipt, and when Sofie later sells her ETH (including the rewards), the rewards are added to her FIFO pool with their respective acquisition dates and prices. For detailed staking tax guidance, see our dedicated staking guide →.

Reporting and Documentation

To comply with SKAT requirements for crypto interest, lending, and staking, maintain the following records: transaction history from each lending platform or protocol showing all interest credits with dates and amounts; exchange rates from the Danish Nationalbank or SKAT's official rates for each credit date; a running FIFO log by cryptocurrency that separates purchased units from interest/staking units; records of any fees paid (gas fees, protocol fees, platform withdrawal fees) that may be deductible; and documentation of any locked or vesting schedules that affect when rewards become available. Report total interest and staking rewards for the tax year in box 20. Report gains from subsequent disposal of interest tokens in box 20 (gains) or box 58 (losses).

Losses on interest-bearing deposits: If the platform or protocol where you deposited crypto for interest suffers a hack, insolvency, or other loss event, you may be entitled to a deduction for the lost principal. The deduction eligibility depends on whether the loss is final and documented. For CeFi platforms that go bankrupt (e.g., BlockFi, Celsius), the loss is generally deductible as a speculative loss in box 58 if you can document the loss is final. For DeFi hacks, the loss may also be deductible, but the requirement that the loss be "final" can be harder to satisfy if there is ongoing litigation or recovery efforts. SKAT's Q&A confirms that if cryptocurrency is lost through fraud, bankruptcy, or theft, you are entitled to a deduction if you can document the loss, the claim falls under the Danish Capital Gains Act (Kursgevinstloven), and the loss is considered final. For more on scam and loss deductions, see our crypto scam loss guide →.

FAQs

Is staking reward taxable at receipt or when I sell?

Staking rewards are taxable at the time they are credited and become available to you. The value in DKK on the credit date is reported as personal income in box 20. When you later sell the staked rewards, any additional gain or loss above that reported value is also taxable as speculative income. This means staking rewards are effectively double-taxed in the sense that the value at receipt is taxed as income, and any appreciation thereafter is taxed as a gain.

What about auto-compounding staking — is each compounding event taxable?

Yes. Each time rewards are automatically restaked (compounded), a new taxable receipt occurs. The value of the reward at that moment is taxable in box 20. This makes auto-compounding staking computationally intensive to track. Most taxpayers use crypto tax software that can import blockchain data and calculate per-event values automatically. Manually tracking compounding on a proof-of-stake chain with short epochs (e.g., Solana with ~400ms epochs) is not practical.

Does the interest deduction (rentefradrag) apply to crypto lending losses?

No. Interest losses on crypto lending are treated as speculative losses under the crypto rules, not as interest expenses under the rentefradrag. The rentefradrag applies to interest on personal debt (mortgages, loans, credit cards), not to losses on crypto deposits. If you lose your deposited crypto in a platform failure, the loss is reported in box 58 as a speculative loss, not as an interest expense deduction.

Do I need to report interest earned on a non-Danish crypto lending platform?

Yes. Danish residents are taxed on their worldwide income, including interest earned on non-Danish lending platforms. The same rules apply: the interest is personal income in box 20, and subsequent disposals follow FIFO speculation rules. You must report the interest even if the platform is based outside Denmark and does not report to SKAT. Under the DAC8 directive, foreign crypto platforms will increasingly be required to report Danish residents' activities to SKAT automatically.

Can I offset losses from a DeFi hack against my staking gains?

Generally, no. Each crypto transaction must be calculated separately under Danish rules. A loss from a DeFi hack on one platform cannot be directly offset against a gain from staking rewards on another platform. However, the net result of all your crypto activity is calculated at the end of the year: total gains (box 20) and total losses (box 58) are reported separately. While losses cannot offset gains directly within the tax calculation under the general rule, the 26% loss deduction rate provides partial relief. In exceptional cases where the same cryptocurrency is involved in a single integrated transaction, offsetting may be possible — consult a tax professional.