The Norwegian government has refused to recognise Bitcoin as a valid currency, saying fails to qualify under the standard definition of money.
The governing body said it would instead treat Bitcoin savings as taxable assets.
Norway's ruling comes in wake of a recent move by Korea to reject Bitcoin as a legal currency, while China's central bank also ruled that it would not recognise Bitcoin as legitimate currency and warned of risks linked with it, in addition to Germany's plan to impose a tax on the virtual currency.
Norway director general of taxation Hans Christian Holte told Bloomberg:"We've done some assessments on what's the right and sound way to handle this in the tax system."
Last month, Bitcoin's value jumped by over 40% to a new high of $750 (£489) in the wake of a US Senate ruling that the digital currency could be a 'legitimate financial service'.
However, the US Homeland Security and Governmental Affairs Committee is currently involved in evaluating the 'promises and risks' associated with the cryptocurrency.
Late last month the value of Bitcoin broke the $1,000 (£613) mark, almost quadrupling in three weeks and for the first time since its launch four years ago.