Mining of digital currency

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:

1. Find the market value of the virtual currency that you’ve mined at the time of mining. Major providers, such as Coinmarketcap offer historical exchange rates for most virtual currencies online for free.
2. Use the currency exchange rates provided by Norges Bank to convert the values into 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 (NOK 30,000 from 1 January 2014) that are mainly used to mine, and that at the time of purchase is expected to have a period of use of at least three years, 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.

Example

• 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.

Calculated income and costs:

Income from Bitcoin mined on 15 May 2020:	NOK   99,676
Income from Bitcoin mined on 15 September 2020:	NOK   96,041
Income from mining 2020:	= NOK 195,717
Depreciating of equipment 2020:	NOK     9,000
Electricity expenses for mining 2020:	NOK   50,000
Costs mining 2020:	= NOK   59,000

 

Income from and expenses linked to mining must be entered in your tax return using the fields Mining income and Mining expenses in the card Virtual assets/cryptocurrency. 

What to do in the tax return

There are two ways of doing this in the card Virtual assets / cryptocurrency:

• you can enter the information for each virtual asset in its own card, or
• enter the summarised information for all virtual assets in one card, with an attachment showing the information for each virtual asset and other virtual properties

Log in to the tax return and select the topic Finance and then the card Virtual assets / cryptocurrency. You’ll get information and guidance on what to do and how to proceed when you’re logged in. There are help texts for every field.

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