What is cryptocurrency?
Cryptocurrency is a word you only hear more and more often, but there are still…
Investment in cryptocurrency may be relevant for both individuals and companies. However, it works so that these investments are taxed in two different ways.
Tax is a comprehensive topic, and it often works in different ways when the theory is put into practice. In this article, however, we will go into the tax rules that apply to companies that want to invest in cryptocurrency in general.
Therefore, we want to emphasize how important it is that you check with the Tax Administration how it is for your company in practice. These are usually very small margins, so it will be beneficial to do so anyway.
But in this article, we will take a closer look at the tax rules that apply to companies that want to invest in cryptocurrency.
Today, one can go ahead and start one’s own business in two ways. Thus, it can be said that today’s companies can be divided into two main groups. These main groups are sole proprietorships and limited companies, which can be abbreviated to ENK and AS, respectively.
What separates a sole proprietorship (ENK) from a joint stock company (AS), is basically the legal aspect of running a business, but also the tax rules .
In today’s modern world, there are many who start for themselves, and they can do so by starting a sole proprietorship. In and of itself, this is free to do, but it is you personally who is legally responsible for the company. You take a big risk, but it is a good alternative if it is to be a livelihood for only yourself.
However, if you have big plans for your business, then sole proprietorships may not be the way to go for you. Maybe your company should invest heavily and try to grow, then a limited company will be a better option. The company is then considered in a way as a separate person.
It is not just individuals and companies the tax is calculated in different ways for. How the tax is calculated will also vary based on whether you have a sole proprietorship or limited liability company.
Because of that, you have to define your business before you can proceed to read about the tax rules. With that said, you probably already know which business you have started. It is basically quite simple, and something you have to have control over in your daily operations.
If you invest in cryptocurrency, you are often called a cryptocurrency investor. The vast majority of people who invest in cryptocurrencies are private individuals or represent a limited company. But it is not completely black and white, and therefore it may sometimes be relevant to establish a sole proprietorship in connection with such an investment.
It is easy to think of investing in cryptocurrency as a hobby, but the extent to which it is considered according to the legal aspect depends on the extent to which you do it. If you are in doubt, we recommend that you contact the Tax Administration, which can help you find out what the company should be considered.
The vast majority of cryptocurrency investors who set up a sole proprietorship are engaged in mining or staking cryptocurrency. Here it is important to emphasize that if you do this on a very large scale, then the person in question often has a relationship with a limited company. But like I said, it’s not all black and white.
Having your own sole proprietorship means that you submit a tax return as a self-employed person, and that you pay advance tax four times in the course of one year. You are responsible for the calculation of the tax, and it is these rules that apply:
As mentioned earlier in this article, you do not have as much legal responsibility if you have a limited company, in that the company is more or less considered a separate person. Of course, you have some legal responsibility, but it is quite limited. It is also not as risky for you personally.
When you run a limited company, the whole process is a little bigger than it is in connection with a person running a sole proprietorship. If you run a limited company, you may have got other investors to invest in your company, and in that way you are more stable in a possible investment in cryptocurrency.
But having a limited company also means that you have more formalities that you have to deal with than you would, for example, have to connect with investing in cryptocurrency as a sole proprietorship. For limited companies, these rules apply:
If you compare the list of tax rules for sole proprietorships and limited companies, it quickly becomes clear that you as a limited company have much more to deal with – even if you take a personally lower risk.
After looking at the tax rules that apply to companies that want to invest in cryptocurrencies, we can conclude that it is the limited companies that pay the most tax on investing in cryptocurrencies based on limited companies and sole proprietorships.
For this reason, it may not be worthwhile to choose to invest in cryptocurrency through your limited company. Below we will take a look at what is the easiest way to invest in cryptocurrency.
In the course of this article, it has become clear that it is limited companies that pay the most tax when they invest in cryptocurrency. In addition, one thing in particular is clear to us, and that is that the easiest way to invest in cryptocurrency is to do so as a private individual.
However, if you want to invest in cryptocurrency as a private individual, it is important to emphasize that there are some tax rules that apply to this group as well. But it is not a topic that we will go into in more detail in this article. You have to check it yourself.
But how do you get started investing in cryptocurrency, if this is something you want to test?
There are several ways to buy and invest in cryptocurrency, but the best way to do it is through a cryptocurrency exchange. There are several crypto exchanges that are popular among Norwegians. An example is the crypto exchange Firi (formerly MiraiEx).
The only thing you need to do before you can start investing is to create an account with the crypto exchange you want to use. In addition, you have to verify your account, which is often done through BankID or by submitting identification such as a passport, etc. Then just get started!