Danmark Kryptoskatt Guide 2023
Har du undret dig over, hvordan kryptotransaktioner beskattes i Danmark? Led ikke længere, vi har sammensat den mest detaljerede danske krypto-skatteguide til dig!
Har du undret dig over, hvordan kryptotransaktioner beskattes i Danmark? Led ikke længere, vi har sammensat den mest detaljerede danske krypto-skatteguide til dig!
Have you been wondering how crypto transactions are taxed in Denmark? Look no further, we have curated the most detailed Denmark crypto tax guide for you!
Are you wondering how crypto taxes work in Austria? Look no further, because you’ve come to the right spot. Here’s a detailed Crypto Tax Guide for Austrian residents.
Are you an ardent crypto enthusiast or someone who wants to be one, but the very thought of crypto taxes intimidates you? Don’t worry you’re not alone, there are thousands of Norwegians who share the same line of thought. Crypto being a new asset class is hugely unregulated across markets in the world and their taxation is barely talked about even in the crypto space. Therefore, it comes as no surprise that people barely know how their crypto transactions will be taxed.
So we took it upon ourselves to create this comprehensive crypto tax guide for Norway residents so that the prospect of crypto taxation is not as intimidating. So that people can clearly understand their tax liabilities and pay their taxes properly. This guide has everything you need to know about crypto taxation in Norway and it will be regularly updated to accommodate any new regulations issued by the Skatteetaten.
So let’s get into it…
The Norwegian tax administration doesn't consider crypto to be a form of currency and views it as a capital asset from a tax perspective. So if a person buys a crypto asset and later sells it for a profit, then it will be considered as a capital gain. However, Norway doesn't have a dedicated capital gains tax, any gains incurred from the disposal of crypto assets are subject to income tax.
As discussed in the above section there is no capital gains tax in Norway, instead, all capital gains are taxed as income and are subject to a flat 22% income tax. The calculation of this rate is based on the aggregate value of cryptocurrencies held as of the first day of the tax year being assessed. It's important to note, however, that if an individual's monthly income surpasses 14,541 Norwegian kroner or their annual income goes beyond 174,500 Norwegian kroner, a progressive bracket tax will be imposed.
In Norway, taxpayers can offset capital losses against capital gains or other taxable income incurred in the same fiscal year. If the total amount of capital losses exceed the aggregate amount of capital gains in a particular year, the excess can be carried forward and applied as a tax deduction in subsequent years, for up to 10 years.
It is important to note that only capital losses from the sale of assets that would have generated taxable gains are eligible for deduction. Moreover, the tax deduction for capital losses is subject to certain limitations. For instance, the maximum amount that can be deducted in a tax year is the lower of NOK 10,000 or 10% of the taxpayer's total taxable income.
You should ensure that they maintain accurate records of their capital gains and losses and consult with a tax professional or the Norwegian Tax Administration for guidance on the rules and limitations regarding the use of capital losses as a tax deduction.
Taxpayers in Norway may claim a tax deduction on lost or stolen crypto under certain conditions. The taxpayer must provide evidence that the loss resulted from theft or embezzlement and that a police report has been filed.
It is important to note that the Norwegian tax authorities will require proof to support the deduction claim. This may involve submitting a police report or other relevant documents to support your claim, and the tax authorities may carry out their own investigation to confirm the loss.
Moreover, the amount of the tax deduction may be subject to certain limitations or restrictions, and the specific circumstances surrounding the loss may also influence the tax deduction available.
And evidently, it’s a two-step process.
The first step is to calculate the cost basis for every asset that you’ve swapped, sold, or gifted during a tax year. Which simply amounts to adding up the cost of acquisition and any fees (transaction fees, gas fees) paid in the process of acquisition.
Once you’ve got that figured out, you can easily calculate your capital gains or losses by subtracting your cost basis from the disposal amount. If it’s positive then it’s gain and is subjected to a flat income tax rate of 22%, and if it’s negative then it’s a loss and while it attracts no tax liabilities, you should actively track all your losses and report them to the Skatteetaten to use them for reducing your tax bill.
The Norwegian tax authorities offer some legal gateways to reducing your tax bill and here’s what you need to know about them:
Every Norwegian resident is offered a basic deduction on any form of income including general income, business income, capital gain, or interest income. For the 2023 tax year, it’s set at NOK 79,600.
However, it’s important to note that this allowance is significantly reduced when staying/living in Norway for only parts of the year.
You can use your capital losses to offset your gains and reduce your tax bill. This has been thoroughly discussed in the section titled “Crypto Losses”.
You can deduct up to NOK 40,000 from your taxable income for pension savings.
If you have children under the age of 12, you can deduct up to a certain amount for childcare expenses. For the 2022 tax year, the maximum deduction for childcare expenses is as follows:
This means that if you have one child under the age of 6 and you have spent NOK 30,000 on childcare during the tax year, you can deduct NOK 25,000 from your taxable income.
In Norway, the accounting method used for cost basis calculations is the FIFO (First-In, First-Out) method. This means that when you sell your crypto assets or any other asset for that matter, the cost basis of the asset sold is calculated based on the price and date of the oldest asset you possess.
Note that the FIFO method is the default method used in Norway, but there are other methods available, such as the LIFO (Last-In, First-Out) method and the average cost method. However, these methods require specific approval from the tax authorities and are generally only available to certain types of businesses or taxpayers.
Here’s how some of the other accounting methods work:
Individuals holding cryptocurrencies may be subject to the wealth tax imposed by their municipality and state, as the value of their crypto assets is taken into account when calculating their net wealth as of January 1st of each year. In other words, owning cryptocurrencies can impact an individual's overall net worth and potential tax liabilities.
Your net wealth is calculated using the following formula:
Net Wealth = (Total Value of Assets) - (Deductible Debt)
You can learn more about personal wealth calculations here.
Your net wealth is taxes based on your Tax Class and Net Asset Threshold as mentioned below:
Not all crypto transactions are taxable in Norway. Here are some transactions that are considered non-taxable by the Norwegian tax authorities:
Listed below are some of the transactions that attract tax liabilities according to the Skatteetaten:
The deadline for reporting cryptocurrency taxes in Norway usually falls on April 30th. However, taxpayers may be given an extension because April 30th lands on a weekend which means this year, the deadline will be extended to May 2nd. If you’re a prior taxpayer or have filed tax earlier, you will receive an email notification containing your preliminary tax return information between March 14th and March 31st.
If you are a crypto trader or investor in Norway, you must know how to report your crypto taxes. Fortunately, Skatteetaten has simplified the process and made it more convenient with its online tax portal.
You can submit your taxes online or by mail, depending on your preference and you need to submit your wealth, capital gains, and income tax together. If you have any questions regarding taxes or if you need assistance, you can contact Skatteetaten between 9:00 and 15:00 on weekdays.
Living outside Norway? No problem.
Dial +47 22 07 70 00 or 800 80 000, and the Norwegian tax authority is at your service guiding you through all the steps of your crypto taxation. Moreover, Skatteetaten offers a video guide on how to file your crypto taxes, which might be really helpful for you if it’s your first time filing your taxes yourself.
Our guide will primarily cover how to file your crypto taxes online in Norway. If you choose to use Skattetaten's online platform, follow these steps to ensure a hassle-free process and avoid potential tax complications down the line:
Option 1: If you wish to enter information for each cryptocurrency
Option 2: If you wish to enter aggregated tax information for many virtual currencies/cryptocurrencies
After entering your information with either option, scroll down to "Årsak til endring/nye opplysninger" (reason for the change/new information), tick the box "Lagt til opplysninger som manglet" (Added information that was missing), and click "Ok". After you click “Ok”, you have successfully submitted your crypto tax return to Skattetaten.
However the process may seem cumbersome, there's no need to worry for you. You can sign up for online platforms like Kryptoskatt which can simplify the procedure by providing step-by-step guidance, identifying potential deductions and credits, and facilitating the direct e-filing of your tax return with Skatteetaten.
If you have earned any income from mining activities or received mining rewards you’re liable for income tax. Moreover, it is mandatory to declare the value of your mining earnings in NOK at the time of token receipt, and you should maintain records of the NOK market value of that time for each token.
What Skatteetaten says about mining:
“Mining of virtual currency means that you receive virtual currency in return for verification activity. Mining usually requires computing power for the method ‘Proof of Work’ to verify transactions on the blockchain and to extract virtual currency.”
You may claim deductions for expenses like equipment, software, and electricity, with an annual depreciation of 30%. Furthermore, if you’re involved in a cooperative mining operation, you must distribute the deductions equally amongst all participants.
While margin and futures trading in cryptocurrencies can yield higher profits, it also entails greater risk. Presently, there is no official guidance on how such activities are to be taxed in Norway.
However, you can use the established regulations on margin, futures, and derivatives trading in conventional financial markets as a reference which explicitly states - any gains or losses arising from such trades are treated like regular income and will be subjected to income tax.
According to Norway's taxation guidelines NFTs are classified as virtual assets and are subject to the same tax regulations as other virtual assets. Although there are various use cases for NFTs, they are all treated as assets and are subject to the following tax treatment.
Minting an NFT may be subject to income tax if the smart contract involved in the process burns crypto assets for minting the NFT on-chain, as this would result in a realization. However, minting an NFT without disposing of any assets, which may be the case with free mints, does not attract any tax liabilities..
Note: Realization typically refers to the conversion of an asset into cash or other forms of value, such as securities or goods.
When selling an NFT, the transaction is considered a realization and therefore, attracts income tax.
If you’re engaging in financial activities on a decentralized platform, also known as DeFi, it is crucial to be aware of the tax implications. While many countries, such as the USA and Germany, have not yet provided clear guidelines on DeFi taxes, taxpayers always take caution to avoid any potential issues.
Fortunately, in Norway, Skatteetaten has issued guidelines regarding DeFi transactions, which offer a detailed insight into the tax treatment of De-Fi transactions.
Skatteetaten has split virtual currencies into seven categories, each with different subcategories for incoming and outgoing transactions. It's important to understand when you've "realized" a cryptocurrency, which means you've transferred ownership in exchange for payment and stopped owning it.
If you're involved in decentralized finance (DeFi) transactions, you need to keep records of your realizations and pay income tax. Moreover, you must figure out whether you've made a profit, loss, or income from your DeFi transactions. Norway has some specific rules for DeFi that are different from other countries.
Here are a few examples:
Yes, Skatteetaten can track your crypto transaction. It has various means to obtain your financial data and ensure that you are adhering to tax regulations. Hence, if you were contemplating omitting certain transactions to reduce your tax bill, we advise you to abandon the idea and instead report all your transactions to Skatteetaten. Below are some channels that provide access points for taxpayers' cryptocurrency transactions to Skatteetaten:
Skatteetaten would ask you to maintain sufficient documentation to substantiate the positions taken on your tax returns. Some of these documents are as follows.
Airdrops are typically regarded as gifts offered by either the blockchain or token holder. And although airdrops are generally small or negligible in value, you are liable for income tax. In some cases, the value of an airdrop at the time of acquisition may be zero, and if so, you can assign a zero acquisition cost. Moreover, you will still be liable to pay income tax when you sell the received assets.
Similar to airdrops, hard forks are also considered as income at the time of receipt. If there is no market value available for the received currency, you may set the acquisition cost to NOK 0. However, you will still be required to pay taxes upon the disposal of the received assets.
Yes, cryptocurrency is legal in Norway. The Norwegian government recognizes cryptocurrency as an asset and a means of payment. In 2019, the Norwegian Financial Supervisory Authority (FSA) issued new regulations that required cryptocurrency exchanges operating in Norway to register with the FSA and comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Additionally, cryptocurrency mining is also legal in Norway, and there are no restrictions on individuals or businesses holding cryptocurrencies.
Crypto transactions are considered taxable by the Skatteetaten and are subjected to two separate classes of tax. The first is income tax and the second is a wealth tax. Any gains or income that you make as a result of crypto transactions is taxed under the income tax laws and your crypto assets are considered in your net wealth calculations and therefore attract a marginal wealth tax as well. This has been thoroughly discussed in the above sections of the tax guide.
No, buying crypto in itself is not a taxable event. However, if it involves the disposal of another asset, then it is most certainly a taxable event. In other words, buying crypto with fiat is not taxable, however, buying one crypto asset and making the payment with another is a taxable event.
We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. Although there’s an easy way to file your crypto taxes using a crypto tax software called Kryptoskatt.
Where all you need to do is log in on the platform, add all your trading accounts, wallets, and De-Fi accounts and sip coffee while Kryptoskatt does all the heavy lifting for you. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within a matter of minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.