Norwegian Authorities Urge Crypto Users To Report Income On Next Return

The Norwegian tax agency has reminded taxpayers who owned or sold crypto in 2020 to include the data when filing their tax returns on April 30

April 22, 2021 | AtoZ Markets – The Norwegian Tax Administration issued a warning to crypto traders ahead of the April 30 deadline for filing tax returns.

According to a notice from the Norwegian Tax Administration (NTA), the government agency advised all taxpayers who handled or sold cryptocurrencies in 2020 to declare them or “risk paying additional taxes.”

Norway imposes a 22% tax for crypto earnings

The NTA said that about 2% of cryptocurrency holders declared which tokens they owned or earned in 2019, fewer than 4,700 people out of an estimated 235,000.

We believe that much of the gap is due to some cryptocurrency holders mistakenly assuming that cryptocurrencies are declared ahead of the tax period and have not thought that they are the ones who have to include them,” said NTA senior adviser Marius Johansen.

Our experience is that most people will follow all laws and regulations, and we will help those who invest in crypto to get it right.”

In Norway, income identified as cryptocurrency gains is taxed at a rate of 22%, similar to the tax on capital gains tax in the United States. Norwegian taxpayers can receive a deduction on their 2020 returns if they have suffered losses due to cryptocurrency investments, but they may have to back up their claims with documentation from any exchange used to hold or trade the digital assets.

The NTA explicitly urged taxpayers who do not report their crypto earnings not to be anonymous. Johansen said that cryptocurrency transactions are “more visible than many people think” and that the agency was closely monitoring the activity, identifying “many tens of thousands of people” who previously did not file their taxes correctly.

Read also: Central Bank of Norway Sees No Urgent Need to Launch CBDC

Cryptocurrency can become a factor that contributes to increasing the tax gap, that is, the difference between the total tax revenue that should be paid to the government and what it actually receives . In Norway, the NTA reported that approximately $20 million of taxed income came from cryptocurrency users.

US lawmakers are considering new legislation to address the tax gap, which has grown from about $400 billion in 2013 to a supposed $1 trillion this year. A bipartisan group reportedly supports a bill by Republican Senator Rob Portman that would aim to prevent US citizens from evading taxes on their cryptocurrency earnings.

Think we missed something? Let us know in the comment section below.

Share Your Opinion, Write a Comment