What Norway’s tax transparency actually means for crypto
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Loading... - Edrice Sabry
- 02 Sep 2024
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Norway's unique approach to tax transparency has led to a fascinating discovery in the world of crypto. Researchers have been able to analyze public tax returns and cross-reference them with data from crypto exchanges, courtesy of the Norwegian authorities. The findings are striking: a significant number of Norwegian crypto holders are not reporting their crypto to the tax authorities.
According to the research, a staggering 88% of Norwegian crypto holders are not disclosing their crypto to the tax authorities. This translates to around 250,000 people, or approximately 6% of the Norwegian population, who are not complying with tax regulations on their crypto holdings. The researchers found that this non-compliance is more prevalent among young, male, and urban individuals.
It's essential to distinguish between failing to disclose crypto holdings and outright tax evasion. While both are illegal, the former may be due to ignorance or oversight, whereas the latter is a deliberate attempt to avoid paying taxes. In this case, many individuals may have small amounts of crypto or be sitting on losses that don't amount to significant tax liabilities.
Calculating the exact amount of revenue lost due to crypto tax non-compliance is challenging, as the necessary information is not readily available. However, the researchers employed a "partial identification approach" to estimate the average amount of tax evasion per non-complier. They believe it falls between $200 and $1,087.
Norway's tax transparency has shed light on a significant issue in the crypto space. While the revenue loss may not be as substantial as expected, the sheer number of non-compliant individuals is a concern. This study highlights the need for greater awareness and education on crypto tax regulations, as well as more effective enforcement mechanisms to ensure compliance.
