Crypto ownership in the Netherlands has exploded in the past few years. Chainalysis ranks this small European country in the top 40 for crypto usage worldwide for 2022 and one of the top countries in Europe. Like many countries worldwide, the rising ownership of digital assets is putting pressure on tax offices to keep up with the tax rules for these digital assets. Unlike many other countries, the Netherlands does not tax crypto using typical capital gains or income methodology.
Yes, crypto is treated as an asset by the Dutch tax authority, Belastingdienst, and is taxed accordingly. If the value of your assets (both crypto and non-crypto) is worth more than €50,000, you will be liable for a net worth tax (Vermogensbelasting).
Dutch taxpayers are taxed on the presumed increase in assets held on the 1st of January each year. The cost basis is derived from the value of the assets held on the 1st of Jan the year before.
Belastingdienst always assumes a gain on assets, never a loss. Dutch taxpayers pay tax on income, wealth and assets according to a 3-box tax system. Each box has its own particular tax rate.
Box 1: income from employment
Box 2: Substantial interest
Box 3: income from assets, savings and investments.
Cryptocurrencies are generally classified into box 3; however, some activities (such as larger-scale mining operations) can be classified into box 1.
Taxable income from employment falls under Box 1 and is taxed according to progressive tax rates. Box 1 also includes income from home ownership, periodic receipts and payments, and benefits relating to income provisions.
For 2022, the personal income tax rates for Box 1 vary from 9.42% to 49.50%.
|Taxable income band||Tax rate|
|€0 – €35,472||9.42%|
|€35,473 – €69,398||37.07%|
This table shows the Personal Income tax rates for 2022 in the Netherlands. Source: PWC
For crypto that falls into box 3, Dutch taxpayers must include their crypto holdings' value in their total assets held on Jan 1st. Belastingdienst will calculate what is known as a ‘fictitious return’ based on the value of the assets held, which is the presumed return over the course of the year from the assets. Dutch taxpayers will then be taxed at 31% on this presumed return.
Fictitious gains are based on the value of a person's assets on Jan 1st. The assumption behind fictitious gains is that the larger the value of a person’s assets, the larger their return on the assets will be. The presumed return for different asset value brackets is listed below.
|Asset Value Bracket||Average Presumed Return|
|Up to €50,000||0%|
|€50,001 to €100,000||1.898%|
|€100,001 to €950,001||4.501%|
*The above are rates for the 2021 tax year and are subject to change.
A Dutch taxpayer calculates the value of their total net assets (including crypto) on the 1st of January as €91,000.
The first €50,000 has a presumed return of 0%. The remaining €41,000 has a presumed return of 1.898%, which is €778.18.
This amount is subject to a 31% tax. This would mean that this person would need to pay €241.24 for this component of their taxes.
As mentioned, some crypto-related activities can fall into Box 1: income tax. These activities include:
- Earning a salary in crypto
- Running a mining operation as a business (see more here)
- Staking rewards
- Liquidity pool rewards
- Interest from DeFi activities
Income from crypto is taxed at the same rate as regular income.
Unlike many other countries which have the concept of capital gains, Belastingdienst does not tax crypto disposals directly. However, as covered above, Dutch taxpayers are taxed on the value of assets held on Jan 1st. This means that if an individual decided to sell all their crypto at the end of December and put the proceeds into a bank account, they would still need to pay tax on the presumed gains of the fiat held in the account.
Belastingdienst is yet to release an official statement regarding DeFi activities and their tax implications. It is worth speaking to a registered tax professional if you are unsure on your tax obligations regarding your DeFi activities.
When considering Belastingdienst’s income tax, some DeFi activities may fall into the income component of your tax obligation. These could include:
- staking rewards
- lending and borrowing
- liquidity pool rewards
- farming tokens
Gifting crypto is tax-free if the amount is less than €3,244 unless you receive the gift from your parents. In this case, the tax-free threshold increases to €6,604. Gifts valued above these thresholds will be taxable.
Donations to a registered charity are tax-free if the amount donated is less than 10% of your total income.
There is no specific guidance on NFTs in the Netherlands in regard to taxes; however, it is highly likely that they will be treated the same as other digital assets such as Bitcoin and Ethereum. This means that the market value of your NFT holdings will need to be included in your net asset value on Jan 1st and will be subject to tax in box 3.
Despite popular belief, cryptocurrency is extremely easy to track and is not as anonymous as many believe. Due to much stricter regulation around cryptocurrency exchanges and digital asset investment, almost all exchanges require users to complete a ‘Know-Your-Customer’ (KYC) identification application before the account can be used to purchase crypto. If you have signed up for any exchange which required this check, it is highly likely that Belastingdienst has your user record from that exchange. Withdrawals to external wallets are also tracked, and it is a simple process to follow the money trail from an exchange account to external wallets due to the availability of data on public blockchains.
The European Union’s sixth Anti-Money Laundering Directive means that any company that provides financial services to customers or other businesses must adhere to stricter regulations regarding customer identification. This directive also means that data is made available between EU member states, so signing up for an exchange in another EU country does not mean that Belastingdienst will be unable to gain access to your data.
The European Commission’s proposed Directive on Administration cooperation (DAC8) is a step towards stricter regulation regarding cryptocurrency ownership and trading. The proposed update will likely take effect in the next 12 months, increasing data availability on cryptocurrency owners to financial authorities across EU member states to address tax evasion or fraud. Once this takes effect, DAC8 may allow the Belastingdienst to specifically search if a person owns cryptocurrency, as well as other information such as holdings, transaction history and withdrawal addresses.
Dutch taxpayers can file their tax return from the 1st of March using the online portal here. The deadline for filing a return is the 1st May of the same year.
Manually maintaining records of all of the above doesn’t sound like much fun, does it? Spoiler: it’s not. That’s where we come in! Our crypto tax calculator software can help you aggregate your crypto transaction data to help calculate any gains, losses, income and/or expenses. As an added bonus, we’ve worked with tax professionals from The Netherlands to ensure our platform follows your region’s guidelines.
Once you’ve imported all your data to form a complete overview of your trading history, you’ll be prompted to reconcile any outstanding lines. After those are reconciled, you’ll have the option to download reports showing these values clearly. These reports and the information included will give you the amounts needed to complete your yearly tax return for Belastingdienst.
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