Joins other countries ruling minding or forging is financial service and therefore exempt from VAT
The Norwegian Tax Administration has ruled (Tax Appeals Board Decision No. SKNS1-2023-30) that income for mining or forging digital currencies such as bitcoin are exempt from VAT. This is based on any income being viewed as a financial services and so exempt from VAT.
The case raised questions as to whether the taxable person’s participation in mining pools for the extraction of cryptocurrency is taxable turnover according to the main rule in the Norwegian Value Added Tax Act § 3-1, including whether the activity can be considered “turnover” in accordance with the definition in the Value Added Tax Act § 1-3 first paragraph letter a) and whether the exception for financial services in the Value Added Tax Act § 3-6 applies.
This falls into line with the preliminary EU VAT on cryptoassets review being undertaken by the VAT Committee. The EU looks likely to conclude that even when within the scope of VAT, it is likely to be an exempt supply since it is a transaction concerning payments and currency – Articles 135(1)(d) and Article135(1)(e) of the VAT Directive.
Alternatively, the exchange tokens received by miners for their exchange token mining activities will generally be outside the scope of VAT in most countries. This is one the basis that the activity does not constitute an economic activity for VAT purposes because there is an insufficient link between any services provided and any consideration
VAT on cryptocurrencies
|Crypto-assets||Payment, security or utility tokens||Treated as currency|
|Creation of tokens||Mining or forging||Out of scope of VAT|
|Supplies free of charge||Airdrop||Out of scope of VAT|
|Supplies for consideration||Taxable; but exempt|
|Storage and transfer||Hot or cold digital wallets||Taxable; but exempt|
|Exchange for crypto-assets or cryptocurrencies||Taxable; but exempt|
|Cryptocurrencies as consideration for supply||Taxable; VAT due|
|Token modification||Modifications, forks or splitting of tokens||Out of scope of VAT|