Tax authorities have warned cryptocurrency dealers before the April 30th tax filing deadline.
According to a tax administration report on Wednesday, the state agency advises all taxpayers who owned or sold the cryptocurrency in 2020 to add it to their tax return or “risk paying additional taxes.” NTA said about 2% of cryptocurrency holders said which tokens they owned or acquired in 2019, which is less than 4,700 out of roughly 235,000 people.
“We think a large part of the gap stems from the fact that some cryptocurrencies have mistakenly assumed that the cryptocurrency was pre-populated in the tax return, and we don’t think they should point that out,” said Marius Johansen, NTA Senior Adviser. “Our experience shows that most people will comply with all laws and regulations, and we will help those who invest in cryptocurrencies to do so correctly.”
In Norway, income designated as earnings from cryptocurrencies is taxed at a rate of 22%, similar to the capital gains tax imposed in the United States. Norwegian taxpayers can receive a discount from their archives for 2020 if they suffer losses from investments in cryptocurrencies, but they may need to support their claims to document exchanges that are used to store or trade digital assets.
The NTA has explicitly warned taxpayers who are reluctant to declare their income from cryptocurrencies that they are not anonymous. Johansen said cryptocurrency transactions are “more straightforward than many people think” and that the agency is closely monitoring this activity and has identified “tens of thousands of people” who previously misreported the tax.
Cryptocurrencies can play an important role in widening the tax gap – the difference between the total tax revenue payable to the government and what it actually gets. In Norway, NTA reports that about $ 20 million in taxable income has come from holders of cryptocurrencies.
US lawmakers are considering a bill to close the tax gap, which has grown from about $ 400 billion in 2013 to $ 1 trillion this year. The bipartisan group reportedly supports Republican Senator Rob Portman’s bill that aims to prevent US citizens from evading taxes on their crypto income.