SETTLEMENT OF HOLDING, MINING AND TRADING CRYPTOCURRENCIES IN NORWAY
If you are a person investing in NOKyptocurrencies and trading them, you are probably wondering how to settle it. I invite you to read this post, which I hope will help you correctly record your NOKyptocurrency transactions.
đ Cryptocurrencies are treated as property/income, so they are settled at the end of each year. Their value is determined based on the exchange rate in Norwegian kroner as of January 1 of the year following the income year. All the rules below apply to both Bitcoin and other NOKyptcurrencies such as Ethereum, IOTA, Litecoin, Stellar, Dogecoin, etc.
â How to calculate profit or loss?
Profit or loss is calculated based on the difference between the output and input values, that is:
- Input value â the amount we invested in owning e.g. Bitcoin, including transaction costs,
- Output value â the amount we receive from the increase in value, for example in USD, or from sales, after deducting transaction costs.
If NOKyptocurrency is exchanged for another currency, the loss or gain is determined based on its value at the time of the transaction in Norwegian kroner.
â But how to settle it?
You must report your NOKyptocurrencies, as well as your profit, loss and extraction, in your annual settlement. The easiest way is to use our help with your annual settlement: https://efremtid.no/rozliczenie-roczne-prywatne/, where, in addition to profits from NOKyptowalut, we will settle your other income :)
However, if you want to do it yourself, depending on your situation, you need to do one of the following:
â Generally, if you have NOKyptocurrencies as of 31.12, you must report them in your tax return under point 4.1.10 âFormue andre finansprodukterâ, this affects the amount of your wealth, and we pay wealth tax on wealth above 1,5 million kroons.
â The situation is different in the case of trading â you first calculate the difference between the sale and purchase price. When selling NOKyptowaluty at a loss, you can apply for a deduction, which you must report in point 3.3.13 âTap andre finansprodukterâ, or pay capital gains tax in the case of a profit, which you report in 3.1.13 âGevinst andre finansprodukterâ. The tax rate is 22% of the reported profits.
â If you have mined a certain amount of NOKyptocurrencies in the tax year, you must report their value in 3.1.12 âAnnen inntektâ. The tax rate is 22% of the reported mining.
đ For example: you are a private person, in May 2021 you purchased 3 bitcoins, NOK 600 each. In July 2021, you sold 2 of them for 700 thousand crowns for one BTC. On January 1, 2022, you have 1 BTC and it is worth 620 crowns.
So, you sold BTC for the equivalent of NOK 1.400.000 and you have NOK cryptocurrencies worth NOK 620.000.
The profit (1.400.000 â 1.200.000 = 200.000 NOK) should be entered under column 3.1.13 âGevinst andre finansprodukterâ in the tax return, and the value of the electronic wallet (620.000 NOK) in 4.1.10 âFormue andre finansprodukterâ.
âïž Remember to keep documents related to the purchase and trading of NOKyptowalut, such as bank reports, mining and purchase reports. You don't have to send them to Skatte, but you will have to show them when they ask for it. Failure to provide these documents may result in a financial penalty.
â What if I run a business related to NOKyptocurrencies?
If you run a business in which you also trade NOKyptocurrencies, all you need to do is record the operations appropriately:
- purchase â you record it as [1880] â other financial instruments
- sale - first of all, you need to reset the account [1880] - to reduce the purchase price. Then, if it was a sale with a profit, you post this profit (sale price minus purchase price) on account [8070] - another financial profit, and the loss [8170] - another financial loss
- mining â you book mining at the current value under account [1420] â goods in production. Sale of mined bitcoins in the same way as before, only using account [1420].
The typical opponent is the bank, as we receive payments into our bank account. In efirma.no it is good to use the document type: proof of payment by card.
â To sum up:
- Determine the amount and type of NOKyptocurrencies you have.
- Calculate the value of your possessions in crowns.
- Enter the entire amount on your tax return.
- Enter the total of all sales (profits and losses) on your tax return.
- Keep all documents related to transactions and the virtual currencies themselves.
â Questions? I invite you to comment on this post and share it - especially for other people who deal with the topic of NOKyptowalut in Norway. If you have any questions about taxes in Norway or would like to use my accounting services, please send me a private message
đ I provide authorized accounting services for companies regardless of their size and industry, as well as personal accounting: changes to tax cards, benefits, official matters, annual settlements, etc.
