The tax authorities will enter 2022 with intensified efforts
Last month, a press release was sent out stating that the Tax Administration will enter 2022 with intensified efforts against those who hide their cryptocurrencies. The tax authorities believe that there are many more Norwegians sitting on cryptocurrencies than those who actually report.
The tax administration has its own expert group that is working to obtain an overview of this. Based on the figures they have available, it is estimated that tens of billions of kroner in cryptocurrency are not reported.
The tax authorities do not only work to monitor this activity. If you have not done so before, you can also contact them with questions, and they will try to help you as much as possible.
If you have values in cryptocurrency, you will therefore have to report them to the Tax Administration ( check more on the Tax Administration’s collection page ). In this article, we will take a closer look at this. How do you go about reporting your cryptocurrencies to the IRS, and what happens if you do not do so?
Do you have to report cryptocurrencies?
This is a question that many people are probably wondering: Do you have to report cryptocurrencies? As we have already mentioned in the introduction, you have to report your cryptocurrencies.
Although this is a fairly clear answer, it does not mean that it is easy to understand. Not everyone is actively involved in cryptocurrency, and then it is not certain that they think that this is actually something that should be reported as well.
The crypto numbers are increasing
The tax return for 2021 is not ready yet, as we are in February 2022 at the time of writing. This article will therefore be based on the Tax Administration’s cryptocurrencies from 2019 and 2020. These figures show that a clear increase in the crypto numbers:
- 8723 people with cryptocurrencies in 2019 vs. 13,846 people in 2020.
- NOK 298 million in crypto revenues in 2019 vs. 951 million in 2020.
- 1.7 billion kroner in assets in 2019 vs. 7.5 billion in 2020.
When you look at these numbers, there is no doubt that the crypto numbers have increased significantly in recent years. And there is no reason to believe that the figures for 2021, 2022 and the years that will follow will be somewhat different.
But not everyone reports
Despite the fact that the Tax Administration’s figures show that there has been a marked increase in cryptocurrencies in recent years, they can state that not everyone reports it. They estimate that it is a matter of tens of billions of kroner that Norwegians keep asking them to have.
There can be many reasons why you do not report your cryptocurrencies. Although of course there are certainly some who do not have clean flour in the bag, this is not the case for everyone. On the contrary!
Surveys conducted by the Tax Administration show that most people actually want to do it right. But not everyone has familiarized themselves well enough with the rules to know how to do it. It may also be that some people are not aware that the regulations also apply to them. Maybe someone has received a cryptocurrency as a gift?
If you know that you are sitting on a cryptocurrency and do not know how to go about reporting it, we would recommend that you call the Tax Administration. They can tell you what rules apply and how to proceed to follow them. It actually does not get easier!
How to report cryptocurrencies
If you contact the Tax Administration, you will probably be informed that it is your responsibility to report your cryptocurrencies. And of course they are absolutely right – it is your responsibility to report what is to be reported to the right body.
If you just bought a cryptocurrency or maybe got it as a gift, it can all be a little confusing. What rules apply to the individual and how do I proceed? Then you have two options. Either you can call the Tax Administration to hear, or you can read on:
- It is your sole responsibility to report cryptocurrencies. You do this by filling it in on your tax return; you will find a separate field where any crypto values should be filled in. The tax return is a document that is filled in and sent to the Tax Administration once a year.
- If you have sold some of the cryptocurrency you owned at the previous registration, then you may receive a tax deduction on it. But then it is important that you take care of all documentation from the process, such as information about entry value and sales price. This is a prerequisite for a possible tax deduction.
- The tax return must be filled in with information about the entire process. This means that you must not only state how much you own at the relevant time, but also any gains and losses.
- In connection with cryptocurrencies, you have the opportunity to change the information and submit a new tax return for three years after the submission deadline has expired.
At first it may seem like a lot to think about, but once you get into how this goes, it will be relatively easy to do. And if you have any questions, just ask for help in some way.
This happens if you do not report your cryptocurrencies
Despite the fact that the rules regarding reporting on cryptocurrencies are so clear, there are still many who do not report it. It is not to be underestimated that many people think that they get more out of it that way.
But in practice it is not so. Instead, it is punishable, and it can lead to very serious consequences. You risk additional taxes, but that’s not the only thing. If it is a very serious case, then you can also risk being reported to the police.