We are now updating the tax return guidance

All guidance to the tax return will be updated well in advance of receiving the tax return for the income year 2019.

Mining of digital currency

If you mine digital currency such as bitcoins, you must declare this in your tax return. You can read more about how you should assess the value here.

Mining of digital currency means that you receive digital currency in return for verification activity.

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. 

In order to calculate the value, you must:

  1. Find out the market value of the digital currency that you owned. Key providers such as Coindesk.com, offer historical rates for the most common currencies.
  2. Use Norges Bank’s USD rate to convert the rates to Norwegian kroner

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. This can be done by depreciating the mining equipment on the balance for the fixed asset through the depreciation form RF-1084. For machinery and equipment used outside business, you can use the balance a) with 30% 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.

Example

  • You’ve mined and received a bitcoin on 15 May 2016 with listed price NOK 10,000, and a bitcoin on 15 September 2016 with listed price NOK 12,000.
  • In 2015, you bought equipment only used for generating virtual currency for a total amount of NOK 50,000. You’ve depreciated the equipment by NOK 15,000 (30% of 50,000) in the tax return for 2015, and the remaining value is NOK 35,000.
  • The mining increased your electricity expenses with NOK 10,000 in 2016.

Calculated income/loss:

Income from bitcoin mined on 15 May 2016: NOK 10,000

Income from bitcoin mined on 15 September 2016: NOK 12,000

Depreciating of equipment (30% of remaining value NOK 35,000): - NOK 10,500

Electricity expenses for mining 2016: - NOK 10,000

Total income from mining in the tax return = NOK 1,500

Mining of digital currency may constitute commercial activity if it has a certain scope, so you'll need to find out whether you're self-employed

If you've made a gain or a loss, enter the value in your tax return. 

You must provide more information if you purchased or sold digital currency during the year. If you have wealth in the form of digital currency, you must declare this in your tax return.

You do not need to send us any documentation, but you must be able to present documentation if we ask for it.