Norway has always been a bit weird when it comes to taxes. Unlike most places, where your tax return is a private matter, Norway just puts it out there for everyone to see. And in the world of crypto, that’s a game-changer.
Economists and researchers have jumped on this, and it turns out, they’ve found some pretty wild stuff.
Tom Meling, Magne Mostad, and Vestre have been digging into these public tax returns, cross-referencing them with data from crypto exchanges, courtesy of the Norwegian authorities.
They also looked at surveys on crypto ownership and how the Norwegian Tax Authority has been enforcing the rules. And what did they find? Surprise, surprise: a whole lot of people aren’t reporting their crypto to the tax man.
So, what’s the big deal? Well, according to the paper by these researchers, a whopping 88% of Norwegian crypto holders aren’t telling the tax authorities about their little digital nest eggs.
They estimate that about 6% of the Norwegian population (which was around 5.4 million in 2022 when they wrapped up this study) are what they call “crypto tax non-compliers.”
In plain English, that’s about 250,000 people who aren’t doing what they’re supposed to when it comes to taxes on their crypto. The researchers found that this crypto tax dodging is mostly happening among young, male, and urban folks. Yeah, the typical crypto bro.
But let’s be clear here—failing to disclose your holdings isn’t exactly the same as straight-up tax evasion. Both are illegal, sure, but a lot of people probably just have small amounts of crypto or are sitting on losses that don’t amount to much in terms of taxes owed.
Now, figuring out how much money is actually being lost because of all this is tricky. The information isn’t exactly being handed over to the authorities on a silver platter.
The surveys don’t tell us the average size of Norwegian crypto holdings, and most of these folks are trading on overseas exchanges that aren’t spilling the beans either. But the researchers took a stab at it, and they think it’s not as big as you might expect.
They used what they call a “partial identification approach” and came up with some estimates. They think the average amount of tax evasion per non-complier is between $200 and $1,087.
So yeah, a lot of people aren’t reporting their crypto, but each one isn’t exactly ripping off the government for a huge amount.
