As cryptocurrencies continue to develop so does the ability of the tax authorities to monitor cryptocurrency. This development is largely due to advanced technological tools and regulatory changes designed to enhance transparency in the crypto market.
Among these tools, Chainalysis is one of the most popular tools used by tax authorities to monitor blockchain transactions. It is not currently known if the Finnish tax authorities use Chainalysis.
However, we can expect that regardless of the tax authorities current capabilities to monitor cryptocurrency transactions, that the tax authorities will almost surely find out about your cryptocurrency holdings once the DAC8 regulations are implemented in the European Union.
The DAC8 mandates that, by January 2026, all cryptocurrency exchanges serving EU clients must directly disclose client information to EU tax authorities.
In a conversation between us and the Finnish tax authority's crypto team, it became evident that they too anticipate that the DAC8 will have a significant impact on Finnish crypto traders. The Finnish tax authorities are preparing for a surge in tax declarations from Finnish citizens as these regulations take effect.
The Consequences of non-declaration
Voluntarily amending a previous tax declaration can lead to fines. However, these fines are significantly less severe than the penalties imposed when the tax authorities discover errors and require you to amend your declaration. In such cases, you'll face a tax increase.
The size of this increase is determined by the severity of the oversight rather than whether the omission was due to negligence or intentional.
The additional tax can range from 2% to 10% of the undeclared income. This rate escalates if the failure to report is habitual or if there is clear disregard for tax obligations. For instance, neglecting to declare cryptocurrency earnings for multiple years could trigger a steeper penalty. In extreme cases, failing to declare taxes might even lead to criminal charges.
If a taxpayer corrects an error voluntarily, the tax increase is significantly reduced to only 0.5% of the undeclared income. Once the tax authorities inform you of the error or omission in your tax return then this 0.5% will no longer apply.
With the implementation of the DAC8 regulations, it's becoming increasingly probable that undeclared cryptocurrencies will be detected by tax authorities by 2026.Making sure to complete your cryptocurrency taxes can substantially reduce your potential penalties.
Other benefits of declaring your cryptocurrencies for previous years
According to 50 § of the Tuloverolaki If you’ve made losses trading cryptocurrencies then these can be deducted from your profits from selling assets such as stocks or crypto, within a five year period.
How are cryptocurrencies taxed?
If you sell more than 1,000 euros worth of crypto or other assets in a year then you’ll have to pay capital income tax on the profits. The tax rate is 30% for profits under 30,000 euros and 34% above this figure.
For some transactions such as staking you’ll instead have to pay income tax.
For a full overview of which transactions are taxed, how they are taxed, and how the hankintameno-olettama can reduce your taxes, you can see our cryptocurrency tax guide for Finland.
How to declare your cryptocurrency taxes for previous years
Calculating your cryptocurrency taxes
The first thing you have to do is calculate your cryptocurrency taxes. Cryptocurrency taxes can be quite difficult. In fact many accountants are purposefully staying away from cryptocurrency because of its complexity.
Luckily there are online tools available for which you don’t need to be a tax or crypto expert to do your taxes yourself. Divly is a cryptocurrency tax calculator designed for Finland. By uploading your transaction history to Divly, Divly will be able to automatically perform the required tax calculations and then guide you through the declaration process on OmaVero.
Declaring your cryptocurrency taxes on MyTax
Declaring your cryptocurrency taxes on MyTax is a straightforward process, allowing you to make a claim for correction up to three years from the start of the year following the tax year's end. For instance, if you're correcting your declaration for 2023, you have until December 31st, 2026 to voluntarily amend your tax information.
Here's a step-by-step guide to being the correction process through MyTax:
Log in to MyTax.
Navigate to the ‘Activities’ tab.
Look for ‘Claims for adjustment’ and open ‘All adjustment matters’.
Choose ‘Claim for adjustment of individual income tax’.
Click on ‘Select the tax year’ next to the year you need to correct.
Find the tax return you wish to modify and click on ‘Make a claim for adjustment of the tax decision’.
Fill in the necessary information pertaining to your situation that requires adjustment.
For declaring cryptocurrencies you want to navigate to the section for reporting capital gains and losses, labeled as Luovutusvoitot. If you're uncertain about how to find the ‘Luovutusvoitot’ section, refer to our detailed guide on declaring your cryptocurrency taxes.
In the ‘Luovutusvoitot’ section, enter the sales prices/ acquisition costs of the cryptocurrencies you sold, as provided by Divly
Upload the capital gains document provided by Divly, which includes detailed calculations of your capital gains or losses.
To complete the process, send the claim.