Norway Urges Crypto Users to Declare Earnings
Key Takeaways:
• Norwegian tax authorities warn crypto users to declare crypto income.
• The Norwegian tax agency is closely watching the crypto market.
Norwegian tax authorities warn crypto users to declare their earnings
With the looming valuation of the cryptocurrency market this year, tax authorities around the globe are zeroing in on individuals who own crypto assets. Norwegian tax authorities are the latest to focus on crypto holders. The Norwegian Tax Administration (NTA) has issued a warning for cryptocurrency owners to declare their earnings before the deadline, April 30.
The formal notice includes information and guidance for taxpayers who owned or sold cryptocurrency in 2020. It urges them to declare earnings in the tax return form. It states that failure to include crypto income could result in “paying additional tax”.
The NTA expects people to take responsibility to file both their earnings and losses. Estimations by the tax agency point that in 2019, over 230,000 people in Norway have transacted with cryptocurrencies. It goes on to say that less than 5,000 of them have filed tax returns. For 2020, the Norwegian Tax Administration has identified over 70,000 users who exchanged cryptocurrencies.
What caused this warning?
The NTA has recently been paying close attention to the crypto space. This is due to the rapid growth of the emerging market and the increasing demand by retail investors. “We think a lot of the gap is due to the fact that some crypto owners mistakenly assume that cryptocurrency is pre-filled in the tax return. They have not thought that they are the ones who have to list this,” said NTA senior adviser Marius Johansen. Mr. Johansen warned that crypto holdings are not anonymous and they can be traced since crypto transactions are “more visible than many people think.”
“Our experience is that most people will follow all laws and regulations, and we will help those who invest in crypto to do it right,” Mr. Johansen says. He also adds that the agency has identified “tens of thousands of people” who did not report cryptocurrency gains for the previous year.
Norway imposes 22% tax on cryptocurrency gains. If the taxpayer has incurred losses, they should mention it in the form and provide proof to receive tax deductions.
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