Foreign currency loans - Reporting of currency gains and losses

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If you have a loan in a foreign currency with a bank and have made a gain or loss on foreign exchange rates during the period, the gain/loss will be reported to the Norwegian Tax Administration by the bank.

If your currency gain or loss is not pre-completed, you can enter your gain in item 3.1.13 and your loss in item 3.3.13.

Contact your bank to calculate the currency gain or loss accurately.

Note that only currency gains and losses linked to actual foreign currency loans can be entered in these items (currency gains and losses relating to hedging contracts/forward foreign exchange contracts must NOT be entered here).

Example calculations

Ordinary loan:

Loan in USD 100,000 Year 1

Exchange rate upon take-up

= 7.5

Repayment USD 20,000 in Year 1 (one   instalment)

 Exchange rate upon repayment

= 8

Currency loss USD 20,000 x (7.5 x 8) 

 

= NOK 10,000

Year 2:

Repayment USD 20,000 at exchange rate of 8

 

Repayment USD 30,000 at exchange rate of 8.5

 

 

 

Currency loss USD 20,000 (7.5 - 8) 

= NOK 10,000

Currency loss USD 30,000 (7.5 - 8.5)

= NOK 30,000

Total

= NOK 40,000

Year 3:

The customer wishes to increase the USD loan by USD 120,000, so that the remaining loan is USD 150,000.

The increase is carried out at an exchange   rate of 9.

 

No repayment

 

The currency gain/loss is

 = NOK 0

Applying the FIFO principle (First-In-First-Out principle)

Year 4:

Repayment of USD 50,000 at an exchange rate of 8.5 (the FIFO regulations are applied in this case)

Currency loss USD 30,000 (7.5 - 8.5) 

= NOK 30,000

Currency gain USD 20,000 (9 - 8.5) 

= NOK 10,000

Total currency loss

 = NOK 20,000

Repayment of foreign currency loan with currency:

Loan in USD 100,000 Year 1

Mid-market rate upon take-up

= 7.5

Repayment USD 20,000 in Year 1 (one   instalment)

Mid-market rate upon repayment

= 8

 

 

 

Currency loss USD 20,000 x (7.5 x 8)

 

= NOK 10,000

We get the same result if we exchange or repay the loan in the same currency as the loan.

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