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With the market rally sending prices of Bitcoin (BTC), Ethereum (ETH), and other cryptos to new all-time highs this year, millions of investors have likely made massive profits from their digital currency holdings by now. Understandably, tax agencies all over the world are making sure that none of those taxable crypto earnings slip through their fingers.
The Norwegian Tax Administration has recently made a move to make sure it gets its share of the crypto earning of the country’s citizens. The tax agency issued a warning to crypto traders ahead of Norway’s deadline for filing tax returns on April 30, according to Cointelegraph.
In the notice, the Norwegian Tax Administration (NTA) reminded taxpayers who owned or sold crypto in 2020 to include the data when filing their tax returns. The agency warned that failure to do so might result in the taxpayer “paying additional tax.”
The agency revealed that only around 4,700 people declared owning crypto in last year’s filing for the year 2019. This means that only 2 percent of the estimated 235,000 crypto owners in the country have included their crypto activities in their returns.
However, the NTA believes that most taxpayers follow the taxation rules in the country. The reason for the discrepancy might just be a misunderstanding on the taxpayers’ part thinking crypto earning are already pre-filled and that they’re not supposed to fill it up in the form themselves.
“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 and have not thought that they are the ones who have to list this,” NTA senior adviser Marius Johansen explained. “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.”
Norway imposes a 22 percent tax rate for crypto earnings. However, taxpayers who suffered losses in their crypto investments can receive deductions but they are required to provide documentation for such losses.
