Norway Crypto Miners See Millions in Profits Tax Office Sends Reminder
Tax authorities in Norway have urged diligence when reporting cryptocurrency profits after news emerged that two miners paid just 74,000 kronor ($8750) in tax on reported holdings of 34 BTC ($218,000).
Much Bitcoin, Little (Taxable) Wealth
As local news outlet Dagens Næringsliv reports August 20, Philip Eriksen and Roy Arne Olsen amassed the funds from a now-defunct mining operation over an extended period.
The pair first made known about their success in interviews with the local press in their home city of Tromso in late 2017, when the value of their holdings hit highs of around $680,000. “Having unrealized millions in cryptocurrency wealth in after two years is a fantastic feeling,” Olsen said at the time.
Now, following the culmination of the tax year, Norway’s treatment of Bitcoin as an asset similar to shares has led to only limited taxation obligations for Olsen and Eriksen.
Tax Agent: Crypto Reporting ‘Often Done Wrong’
Speaking to Dagens Næringsliv, Astrid M. Dugstad Tveter of the Norwegian Tax Administration stressed that the onus was still on individuals to report gains or losses in cryptocurrency. She said:
The person who has bought, sold, mined or has values placed in virtual currency, such as bitcoin, must report this in the tax report. A challenge with cryptocurrency is that the Tax Administration does not get this automatically reported by a third party, as with other types of basic data. The experience is that it is often done wrong, both deliberately and subconsciously, with such information.
Europe remains a patchwork environment regarding cryptocurrency taxation, despite efforts by national regulators to get to grips with increasing adoption.
Despite the scale of the undertaking, Dugstad Tveter added there were still ways and means of ensuring reported pluses and minuses correspond to reality.
“The tax office generally has access to information from more sources than the information we receive from taxpayers through the tax report and uses different control methods, both in terms of tracking up values and to check whether taxpayers have provided correct and complete information,” she warned.