Mining of digital currency
If you've mined virtual currency such as bitcoins, you must declare it in your tax return. You can read more about how you should assess the value below.
Mining of virtual currency means that you receive virtual currency in return for verification activity.
"Proof of Work", "Proof of Stake” and hybrids and other protocols rewarded with virtual currency must be reported this way.
What you must do
Digital currency you receive through mining becomes tax liable when you receive it. In order to calculate your tax obligation, you must know how much you mined at different times during the year.
To calculate the value, you must:
- Find the market value of the virtual currency that you’ve mined at the time of mining. You can find historical market value rates of most virtual currencies online, for example at Coinmarketcap.com.
- Use the USD rate from the Central bank of Norway (Norges Bank) to convert the rates to Norwegian kroner.
This value will also be your input value if you at a later date sell the virtual currency you’ve mined.
When calculating taxable income, you can claim deductions in connection with the mining you’ve done during the year. Deductions could be expenses for purchasing machinery, software and electricity.
- If you've purchased machinery and equipment costing more than NOK 15,000 that are mainly used to mine, you cannot deduct the expense directly in the year you bought the machinery. Several components bought separately and assembled can be seen as one piece of machinery. However, you can depreciate the expenses over several years. This means that you can claim a deduction for a part of the cost price every year. For machinery and equipment used outside business, you can use 30 percent annual depreciation.
- The deduction you can claim for electricity could be the increased electricity expenses compared to what you pay without generating virtual currency.
If you've mined virtual currency by being a part of a cooperative or similar, your share of the expenses must be divided according to the number of virtual currency you’ve received.
- You’ve mined and received a Bitcoin on 15 May 2020 with market value NOK 99 676, and a Bitcoin on 15 September 2020 with market value NOK 96,041.
- In 2020, you bought equipment only used for generating virtual currency for a total amount of NOK 30,000. You’ve depreciated the equipment by NOK 9,000 (30% of 30,000) in the tax return for 2020. The remaining value of the equipment will be NOK 21,000 and next year the depreciation will be 30 percent of this amount and amounts to NOK 6,300.
- The mining increased your electricity expenses with NOK 50,000 in 2020.
Income from Bitcoin mined
on 15 May 2020: NOK 99,676
Income from Bitcoin mined
on 15 September 2020: NOK 96,041
Depreciating of equipment : - NOK 9,000
Electricity expenses for mining 2020: - NOK 50,000
Total income from mining in the tax return = NOK 136,717
If you have income from mining, you must add the value in your tax return.
There are two ways you can enter gain/loss in the new tax return: You can list every item individually, or you can provide an overview.
Log in to the tax return and select the topic Finance – Virtual currency/cryptocurrency. You’ll get information and guidance as to what and how to proceed when you’re logged in. There are help texts for every field.
A tip is to add fields for currency if you want to list income and wealth for example in USD (American Dollars) or EUR (Euros).
You do not need to send us any documentation, but you must be able to present documentation if we ask for it.