How to declare income from virtual currencies and crypto assets in MyTax
Transactions with virtual currency such as selling, exchanging, and using it as a method of payment may result in income for you. In addition, the mining of virtual currency may also generate income for you. ‘Virtual currency’, as referred to here, means all kinds of crypto assets.
Contents
A. Sales, exchanges, forms of use of virtual currency
A. Sales, exchanges, forms of use of virtual currency
Sales mean that you exchange a virtual currency for one or more other virtual currencies or for fiat currency (euros, for example), or that you use a virtual currency to buy something or for paying an invoice.
You can report your sales in MyTax
a) one by one; or
b) at the same time for the whole year.
You can let the Tax Administration know of your selling without delay, during the ongoing tax year, so the resulting taxable crypto income becomes covered by the percentage of tax withholding on your tax card. Alternatively, your income-tax prepayments may be re-calculated – and raised – during the ongoing tax year. This would be advisable if you sell a considerable amount of virtual currency at once. The final time when you must declare the selling is the time when you fill in the pre-completed tax return for the year.
If you report full-year sales at once, note the following:
- Save a separate calculation of capital gains as an attachment, itemising all sales transactions of the year. A useful tool to help you prepare the capital gains calculation is the Tax Administration’s FIFO calculator (in Finnish and Swedish, link to Finnish). If you use the Tax Administration’s FIFO calculator, make individual calculations for each type of virtual currency and crypto asset sold. For example, if you sold some Bitcoins and additionally some Litecoins, make two calculations to keep them apart.
- If during the tax year, you made sales that generated both gains and losses, you need to enter two calculations of capital gains in the MyTax input fields in addition to the attachment file – one for the sales that generated gains, the other for those that generated losses. This will ensure that the losses get deducted from the gains in the right order.
This is how to proceed:- Select sales that have generated gains and sales that have generated losses separately from your calculation. If you use the Tax Administration’s FIFO calculator, you can, after calculating, see transactions that generated gains and losses in the top left corner of the table.
- Start by filling in a calculation of sales that generated gains in MyTax. Here, you can report combined sales of different virtual currencies that generated gains (in other words, you do not need to fill in a separate itemisation of bitcoins and litecoins, for example, in MyTax).
- Next, select Add new transfer and fill in a calculation of sales that generated a loss.
How to declare sales in MyTax
Log in to MyTax (opens in a new window)
1. First, select whether you are providing information for the tax return or for the tax card
- Report the earned income (the “proof-of-work” protocol) you received from mining in the Other earned income section of the tax return.
- If you paid expenses related to mining, fill in the amounts under Deductions – Expenses for the production of income –
Expenses for the production of other income than wage income. These expenses include the costs arising from the increased use of electricity and the acquisition cost, either fully or in part, of any equipment used for mining. - Report the capital income (the “proof-of-stake” protocol) you received from mining under Other capital income. If you claim any tax deductions connected to this income, enter the amounts under Other deductions from capital income.
- Report the earned income (the “proof-of-work” protocol) you get from mining under Other income – Other income subject to prepayments on the application form. You will need to scroll down the page and click on Show more... The Other income subject to prepayments field is at the bottom of the page.
- Enter the net amount of income from your mining when you request a tax card: Calculate the sum total of all income you earn from crypto mining during the year. Subtract the expenses related to the income from mining.
- Report the capital income (the “proof-of-stake” protocol) you receive from mining under Other capital income. If you claim any tax deductions connected to this income, enter the amounts under Other deductions from capital income.