If you sold digital currency such as bitcoins during the income year, a gain or loss may have arisen that you must declare in the tax return. Use the form RF-1159 - Gain, loss, dividend and capital value of shares and other financial products. You can read more about how you should assess the value here.
What you must do
Your broker/exchanger will be able to tell you how much bitcoin and other digital currency you purchased/sold and the relevant dates.
You must calculate the gain or loss as of the transaction date.
You can find out whether a gain or loss has arisen by calculating the difference between the input value and the output value.
The input value must be calculated using different methods depending on whether you've:
Paid for digital currency using ordinary currency
Input value = What you paid as of the transaction date, including transaction costs.
You must declare the value in Norwegian kroner using the exchange rates applicable as of the date of sale.
Input value in Norwegian kroner = Number of digital units * exchange rate for the digital currency * USD exchange rate + (transaction cost * USD exchange rate if the transaction cost is in USD)
- You purchased 1.32 bitcoins on 13 October 2017
- The bitcoin exchange rate at the time was USD 5,640.13.
- The USD/NOK exchange rate was 7.9077.
- The transaction costs per transaction were USD 3.
Input value in Norwegian kroner: 1.32 * 5,640.13 * 7.9077 + 3 * 7.9077 = NOK 58 896,33
Paid for digital currency using other digital currency
Input value = The value of the digital payment currency in Norwegian kroner as of the date of purchase.
Mined/extracted digital currency yourself
Input value = The market value of the digital currency at the time of mining, adjusted for any deductible costs and costs that must be capitalised.
The fee you receive upon realisation, minus your transaction costs, constitutes the output value.
If the fee is a different digital currency, you should calculate the output value based on the value of the digital payment currency in Norwegian kroner as of the transaction date.
If you own several units of the same digital currency, you must decide which unit has actually been realised and what the input value was for that specific unit.
You do not necessarily have to sell the units in the same order that you bought them. In other words, the FIFO (First In, First Out) principle does not apply, as it does for shares, for example.
Output value in Norwegian kroner = Number of digital units * exchange rate for the digital currency * USD exchange rate - (transaction cost * USD exchange rate if the transaction cost is in USD).
- You sold 1.32 bitcoins on 14 December 2017.
- The bitcoin exchange rate was USD 16,531.08 on 14 December 2017.
- The USD/NOK exchange rate was 8.2552 on 14 December 2017.
- The transaction costs per transaction amounted to USD 21.7.
The output value in Norwegian kroner will be
1.32 * 16,531.08 * 8.2552 - 21.7 * 8.2552 = NOK 179,957.79
Assessing gain/loss in Norwegian kroner
You must assess the gain/loss in Norwegian kroner as of the transaction date.
In order to calculate the value, you must:
- Find out the market value of the digital currency as of the date of purchase, sale and mining. Use the exchange rate of the market place where you purchased/sold the digital currency. If it's difficult to obtain exchange rates/documentation from the provider, a number of organisations offer historical exchange rates for the most common currencies.
- Use Norges Bank’s USD rateto convert the listed prices to Norwegian currency.
Currency effects that arise because of you having to convert to Norwegian kroner should be included in the gain and loss settlement for the digital currency.
Such currency effects can therefore either increase or reduce the gain or loss. You should not perform a separate gain/loss calculation for the currency effect.
- Output value – Input value (Cost price)
- Digital currency exchange rate * USD exchange rate
- Convert USD to NOK for input value and output value
We use the same example as above:
- On 14 December 2017, you sell 1.32 bitcoins that you purchased on 13 October 2017
- Your input value, including transaction costs, amounted to NOK 58,903.92.
- Your output value, including transaction costs, amounted to NOK 179,957.79.
Your gain for this transaction: NOK 179,957.79 – NOK 58,903.92 = NOK 121,053.87
You use the bitcoins you've purchased to buy ethereum.
- You buy ethereum on 14 December in exchange for the 1.32 bitcoins that you bought on 13 October.
- The bitcoin exchange rate at the time was USD 16,531.08.
- The ethereum exchange rate at the time was USD 695.82.
- The transaction cost was USD 21.7.
- You purchase ethereum for bitcoin at the following cost: 1.32 * 16,531.08 - 21.7 = USD 21,799.33 (This corresponds to NOK 179,957.79)
With that, you purchase 31.329 ethereum (21,799.33 / 695.82 = 31.329). As the value of the ethereum that you purchase is equal to the value of the bitcoins that you sell, the input value of the ethereum will be equal to the output value of the bitcoins. The transaction represents the realisation of bitcoins and you must report it in the same way as a transaction involving normal currency (Fiat).
The gain in Norwegian kroner will be the output value - input value:
NOK 179,957.79 - NOK 58,903.92 = NOK 121,053.87
It makes no difference whether you realise against an ordinary currency or a digital currency.
You must enter gain and loss from sale of digital currency in the form RF-1159 - Gain, loss, dividend and capital value of shares and other financial products. RF-1159 is an attachment to the tax return.
You do not need to send us any documentation, but you must be able to present documentation if we ask for it.