Tax deduction in connection with investment fraud

If you’ve been tricked into investing in something you thought would provide an income on which you would have paid taxes, you may be entitled to a loss deduction on the investment.

Does this apply to me?

Being entitled to a deduction means that you can deduct certain expenses from your income before paying taxes. Then the basis for calculating your tax will be lower, and you’ll pay less tax.

A deduction entitlement for investment fraud applies to you if you:

  • have invested in something that would have provided a taxable income.
  • have been tricked into investing in something that proved to be fictitious or worthless.
  • have clarified that it is not possible to be reimbursed any of the investment.

You must have invested in good faith. This means that you had an expectation that the investment would provide you with an income on which you would have paid tax.

The deduction entitlement only applies for investment fraud.

  • Love fraud - for example, when you’ve been tricked into paying expenses for a fictitious girlfriend or boyfriend.
  • Money mule fraud - if you’ve been the middleman in a trade you thought was real but turned out to be fictitious.
  • CEO fraud - for example, if you’ve been tricked into transferring money in a company for a fictitious director.
  • BankID fraud - if you’ve been tricked into giving up access to your BankID.

Phishing and smishing fraud - if you’ve been tricked into giving up access to valuables by clicking on links in an email or SMS.

What you need to do

You must do what you can to minimise the damage.

  • Contact your bank. Try stopping the transactions. Block the BankID, card and accounts that may be exposed.
  • Contact the police to report and inform them of the fraud.
  • Collect all the information and documentation you can about the fraud.

  • Check to see if you can get some of your investment back from your bank, credit card company, or others.
  • Find out if you can have your loss covered through insurance.

  • You must have been acting in good faith, which means that you believed that what you were doing was right.
  • You must have expected that the investment would provide income that you would pay tax on.
  • You must have actively tried to get back all or part of the investment.

You must provide evidence that your loss is the result of a fraud.

You must be able to document all the amounts you’re claiming a deduction for. You must be able to present:

  • A detailed description of how the fraud was carried out.
  • Documents showing how you could have received income you would pay tax on. This could be, for example, calculations that show the connection between what you invested and the possible income it could have had.
  • Documents showing that you have tried to get back your loss. This could, for example, be a dismissed police case, documents from the insurance company or from your bank.

Other useful documents can be:

  • a timeline
  • conversation logs
  • emails
  • agreements and contracts
  • police reports
  • links to or screenshots from websites
  • media reports about the fraud

When you submit your tax return, you enter the investment on under the topic Finance.

Here you answer questions about the fraud, fill in the lost amount and attach documentation.

Log in, check and submit your tax return:

Open your tax return

You can claim a deduction for this

You may be entitled to a tax deduction for

  • the investment amount, which means the amount you have paid to the fraudster
  • any expenses, for example in a court case

You cannot claim a deduction for lost returns, earned retained dividends or lost increases in the investment value.

You must deduct any amount that you’ve been refunded or can be refunded later.

Investment amount + expenses - refunded amount = loss deduction

You receive an email about a sound investment opportunity, you answer and receive a call from a professional fraudster who convinces you to invest NOK 10,000. You start by investing NOK 1,000 to see if it offers a good return.

You transfer NOK 1,000 to a foreign account and pay the bank a NOK 10 fee.

After a brief period, the fraudster shows you that you have earned NOK 500 and transfers the amount to your account. You then invest the remaining NOK 9,000 and transfer them to a foreign account. You pay NOK 90 in fees to your bank.

After a while, the fraudster shows you that you have earned NOK 6,000, so you have NOK 16,000. The fraudster asks you to invest more. You want to end the investment and must pay the fraudster NOK 2,000 to get your money. You pay NOK 2,000 to a foreign account and NOK 20 in fees to your bank, but nothing happens. After this, it’s not possible to get hold of the fraudster or your money.

You can claim a deduction for this:
Investment: NOK 1,000 + NOK 9,000 = NOK 10,000

Bank expenses: NOK 10 + NOK 90 + NOK 20 = NOK 120

Expenses to fraudster: NOK 2,000

You cannot claim a deduction for this:
The amount you’ve been paid by the fraudster: NOK 500

Deductions you can enter for your loss:
NOK 10,000 + 120 + 2,000 - 500 = NOK 11,620