Norway's tax authority, Skatteetaten, has reported a significant increase in cryptocurrency reporting, with a 30% jump in taxpayers declaring their digital asset holdings. This surge is attributed to the agency's proactive compliance efforts and increased awareness among taxpayers regarding crypto tax obligations.
In 2024, over 73,000 individuals in Norway reported owning cryptocurrency, with combined holdings worth 40 billion kroner (approximately $4 billion USD). This represents a substantial increase from approximately 6,500 individuals in 2019, highlighting the growing adoption of cryptocurrencies in Norway. The value of reported crypto assets more than doubled compared to 2023, indicating both increased participation and rising asset values.
Nina Schanke Funnemark, the tax director at Skatteetaten, stated that the authority has implemented "several measures in recent years" to encourage cryptocurrency reporting. These measures appear to be effective in raising awareness and improving compliance among Norwegian taxpayers. Skatteetaten considers cryptocurrencies as virtual currencies subject to standard asset tax regulations. While some businesses accept cryptocurrencies, they are not considered ordinary currency because a central bank does not issue or guarantee them.
Under Norwegian tax law, profits from cryptocurrency trading are treated as capital income and are subject to a flat tax rate of 22%. This applies to profits from selling cryptocurrency, exchanging it for other assets, or using it to purchase goods and services. Taxpayers are required to report all cryptocurrency transactions, including acquisitions, sales, and exchanges, in their annual tax returns. Even if cryptocurrency is sold and the proceeds remain within the same exchange platform, the transaction is still considered a taxable event.
Losses from cryptocurrency trading are also deductible at a rate of 22%. These losses can be carried forward to offset future capital gains. Taxpayers must maintain accurate records of all cryptocurrency transactions, including purchase prices, sale prices, and dates, to accurately calculate their tax obligations.
Skatteetaten provides guidance on the tax treatment of various cryptocurrency-related activities, including mining and decentralized finance (DeFi). Income from mining is taxable when the cryptocurrency is received, and taxpayers can deduct expenses for equipment, software, and electricity. DeFi transactions, such as swapping, liquidity pool participation, and management tokens, also trigger taxable events.
The increased reporting of cryptocurrency holdings in Norway reflects a growing awareness of tax obligations and the effectiveness of the tax authority's compliance efforts. As cryptocurrency adoption continues to rise, it is crucial for taxpayers to understand and comply with the relevant tax regulations to avoid potential penalties. Resources like Firi's tax calculation tools and guides from Skatteetaten can assist taxpayers in navigating the complexities of cryptocurrency taxation in Norway.
