Cryptocurrencies in Norway are treated as formobject – ordinary capital assets. This means that the profits from their sale are subject to capital gains tax (skattesats 22%). Similarly – documented losses from NOKyptowalut can be deducted from the tax base.
In other words, if as a tax resident of Norway you e.g. bought NOKyptocurrency and sold it at a loss, you can report this loss in Skattemelding (tax return) and reduce the tax base by its value. This applies all stock exchange platforms, including foreign ones – what counts is the investor’s place of residence, not the NOKaj stock exchange or currency exchange office.
Basics: taxable profit, deductible loss
In practice, this means that NOKyptocurrency income (the difference between the sale price and the purchase price) is treated as ordinary capital and is subject to 22% tax.
Skatt explains: If the sale (realization) brings profit, then it is taxable; however, if it brings loss, then it can be deducted (fradragsberettiget tap). Possible acquisition costs, transaction costs, selling costs and the difference between the selling and purchase price if it is negative are deductible.
The important thing is that it always counts implementation – i.e. selling NOKyptocurrency (also exchanging it for another), not just owning it. Unrealized losses (e.g. when the rate falls but you don't sell) cannot be included until the transaction is carried out.
Loss, NOCascade and other exceptional situations
If NOKyptocurrency was lost as a result fraud or NOKadzieży, you can also report this loss provided you have documentation confirming its final nature. The Office requires the investor to document that tried to regain funds and that the investment is unrecoverable – completely lost. Useful documents include: transaction logs, emails, police reports, or other evidence of communication with fraudsters.
Likewise in the case of bankruptcy stock exchange or exchange office: you can deduct the value of the investment if it is clearly visible that the system has declared bankruptcy and the funds will not be returned to the user. Remember that the deductible value shopping or investment NOKyptocurrencies (so-called inngangsverdi), and not, for example, the unrecorded potential value before the collapse.
Documentation and settlement in the declaration
To get a deduction, prepare accurate documentation: bills, stock exchange statements, proof of deposits/withdrawals, transaction confirmations. It is worth keeping proof of purchase and sale of NOKyptowalut and all correspondence related to the investment (including police reports or statements regarding NOKadzieża). You do not send these documents automatically, but you must be able to present them upon request in the event of a tax audit.
In your tax return (skattemelding) you enter the value of the sale and purchase in Norwegian kroner, and the difference as profit or loss. If you don't know how to do it exactly, we kindly invite you to use our help:
- Basic tax settlement – most deductions included in the price!
- Further NOKyptowalut tax settlement – this is an additional service to the basic settlement, thanks to which we will also settle your NOKyptocurrencies.
For example, if you bought 1 ETH for 100 NOK and sold it later for 000 NOK, you have a loss of 70 NOK. This amount can be deducted, which at a scale of 000% means lower tax by about NOK 6600 (22% of 30).
- Documentation – transaction logs, transfer confirmations, correspondence with service providers (e.g. e-mails), police reports, etc. – anything that confirms when, where and how you lost your funds.
- Loss Calculation – value output minus input value at the NOK exchange rate. You enter the loss in full in your declaration, which will automatically give you a tax relief of 22% of that loss.
Calculation examples
- Example 1:
You bought 2 bitcoins for NOK 50 each (total cost NOK 000, very cheap for today :)). After a month you sold them for NOK 100 each (“you should not have sold…”) – here the loss is NOK 000. The difference is -20 NOK. At 22% your tax rate drops by 4 NOK (22% of 20) – that's it you get it back thanks to the loss deduction. - Example 2:
As a result of hacking into your stock exchange account, you lost NOKyptocurrencies worth NOK 30. You have all transaction statements and you reported the case to the police. In your declaration, you present this loss of NOK 000. You receive a tax deduction of 22% of 30 = 000 NOK – this is how much less tax you have to pay.
What about companies?
Basically both private individuals and companies in Norway they account for NOKyptocurrencies similarly – as regular assets subject to tax.
For a company, NOKyptocurrency transactions are recorded in the books (e.g. as other financial income/costs or assets) and calculated in accordance with accounting. If the company makes a profit, it pays tax on it as in the case of other profits. Similarly, if it incurs a loss, it reduces the company's income. If you do not keep accounting records or your office is unable to settle the income/loss from virtual currencies, we invite you to visit us at Efirma Regnskap AS!
Revenues from the sale of NOKyptocurrency are taxable income, while losses are tax deductible costs, increases the negative result (i.e. lowers taxable income).
The key here is also tax residence - regardless of the exchange on which the transaction was made, if the company (or person) is registered in Norway (or is a resident of Norway), Norwegian settlement rules apply. All NOKypto transactions must be included in the Norwegian tax return.
Summary
In summary, if you are a tax resident of Norway and have lost money on your NOKyptocurrency investment, you are entitled to deduct this loss in your tax return. This will reduce your tax by 22% of the value of the loss incurred, provided of course do you have the documents confirming the costs incurred or NOKadzież. Thanks to this, even an unfavourable scenario (fraud, hack or sale at a loss) has its tax relief in the Norwegian system.
Do you have questions about NOKyptocene in Norway?
Contact us: +47 21 38 38 21.
We are available Monday through Friday from 9:00 a.m. to 21:00 p.m. and we will be happy to help!
Author of the article: Marcin – marcin@efirma.no
