With the introduction of a new tax office in Decentraland, a virtual world built on Ethereum, Norway has entered the metaverse.
At the Nokios Seminar 2022, the Norwegian Tax Agency (Skatteetaten) and the Brnnysund, the country’s central register, unveiled their plans to expand into the metaverse. Ernst & Young (EY), one of the “big four” accounting firms, will partner with government agencies to set up the virtual office.
The Brnnysund, responsible for maintaining Norway’s public registers, is investigating web3 products such as smart contracts, wallets, and DAOs, in addition to the tax office.
Norway’s efforts to foster the youth of the future
The Norwegian government is aiming its tax collection efforts toward the country’s tech-savvy, internet-addicted youth.
“The metaverse offers a new type of innovation that will be important for the future, and this innovation challenges the public sector and demands a renewal of knowledge, both in terms of thinking and service offerings,” Brønnøysund stated.
EY’s take on the virtual tax office
In a LinkedIn article, Magnus Jones, head of EY’s Nordic Blockchain practice, discussed Norway’s hopes for the metaverse. He praised the Norwegian government for taking the initiative.
“Kudos once again to Norwegian authorities who dare to make moves to bring clarity in a complex landscape. Building further on issuing world first guidance on taxing DeFi and NFTs, and being a front runner in the crypto space in general,” Jones wrote.
Norwegian efforts in the crypto space
The Nordic country has wider blockchain goals than just the virtual world. In June of this year, the government came clean about using Arbitrum, a scaling solution built on Ethereum, to publish capitalization tables for privately held businesses.
More recently, Norway’s central bank collaborated with the Bank for International Settlements on Project Icebreaker to investigate the use of CBDCs in cross-border retail and remittance transactions. Israel and Sweden both contributed to this endeavor.
This year, EY polled crypto usage in Norway and on-chain analytics firm Arcane Research. According to the results, 10% of Norwegian adults are crypto holders.
As reported by Global Legal Insights, the Norwegian government treats cryptocurrency as an asset for tax purposes, meaning that any profits or losses are taxed as capital gains at the standard rate of 22%.