Taxes
Two Norwegian cryptocurrency miners have garnered national media attention after declaring taxable incomes of less than $20,000 USD despite having admitted to owning at least 34 bitcoins during December of last year.
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Reported Incomes of Two Norwegian Crypto Miners Subject of National Scrutiny
Twenty-two-year-old cryptocurrency miners from the Norwegian municipality of Harstad, Philip Eriksen and Roy Arne Olsen, have become the subject of national media attention following their reported incomes for 2017 of less than $20,000 USD, despite Mr. Eriksen’s admittance during December 2017 that he owned 34 bitcoins – then valued at approximately NOK 5.5 million (nearly $657,000 USD). During the same month, Mr. Olsen told local media: “Having an unrealized million wealth in cryptocurrency after two years is a fantastic […] feeling,” according to a rough translation.
For 2017, Mr. Eriksen and Mr. Olsen both reported NOK 0 million in wealth and respective taxable incomes of NOK 105,000 (approximately $12,540 USD) and NOK 150,000 ($17,915 USD). As such, Mr. Erisken is required to pay NOK 29,000 (roughly $3500) in taxes for 2017, and Mr. Olsen is required to pay NOK 45,000 (nearly $5,400).
The two miners have now sought to keep a low media profile, with Mr. Erisken telling reporters that the pair no longer wants to be the subject of press attention. Their current stance comprises a direct contrast to late last year, during which local media reported that Mr. Eriksen had purchased a Rolex watch and an apartment in the Norwegian cultural hub of Tromso.
In another interview, Mr. Erisken also asserted that many cryptocurrency users will not accurately declare their taxation obligations, stating ”You get an additional tax if you do not report, but it’s a little frightful for the Tax Administration that they do not know who has bitcoin and not.”
Cryptocurrency Poses Challenge for Norwegian Tax Administration
Astrid M. Dugstad Tveter, a spokesperson for The Norwegian Tax Administration, stated: “The person who has bought, sold, mined or has values placed in virtual currency, such as bitcoin, must report this in the tax report.” Whilst not wanting to comment on individual cases, Mrs. Tveter also emphasized deductible debts, for example from a mortgage, can significantly reduce the value of an individual’s net assets.
“A challenge with cryptocurrency is that the Tax Administration does not get this automatically reported by a third party, as with other types of basic data. The experience is that it is often made wrong,” Mrs. Tveter said, adding: “The tax office generally has access to information from more sources than the information we receive from taxpayers through the tax report and uses different control methods, both in terms of tracking up values and to check whether taxpayers have provided correct and complete information.”
What is your response to Norwegian media’s coverage pertaining to the low taxable incomes posted by Mr. Eriksen and Mr. Olsen? Share your thoughts in the comments section below!
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