Crypto Reporting Obligations in the Netherlands: A Taxpayer's Guide

Are you a cryptocurrency investor in the Netherlands trying to navigate the complexities of crypto taxes? 

Look no further! 

In this comprehensive guide, we'll walk you through the essential aspects of crypto reporting obligations by The Dutch Tax and Customs Administration, known as Belastingdienst for the tax year 2023.

Understanding Dutch Crypto Tax Basics

Is Crypto Taxable in the Netherlands?

Yes, according to the Dutch Tax and Customs Administration (Belastingdienst), cryptocurrencies are considered taxable assets. Much like stocks and equities, crypto is treated as a personal asset, and its taxation is based on the presumed increase in value.

How is Crypto Taxed?

In the Netherlands, crypto assets are taxed on the presumed increase in value from the beginning to the end of the financial tax year. This means that even holding onto your crypto, commonly known as HODLing, is subject to taxation. The tax is not directly applied to the gains from selling or exchanging crypto but on the overall portfolio value on January 1st of the tax year.

Reporting to the Belastingdienst

Which Boxes Matter?

When it comes to reporting your crypto to the Belastingdienst, you'll primarily deal with two boxes:

• Box 1: Taxable income from work or home ownership
• Box 3: Benefits from savings and investments

Your crypto's value on January 1st of the tax year is reported under Box 3. However, certain crypto activities, such as getting paid in crypto, day trading, mining, and receiving rewards from bounties or operating a masternode, may fall under Box 1.

Calculating the Tax - What are Fictitious Gains?

Tax calculations can be a source of stress, especially when terms like "fictitious gains" enter the picture. we'll break down the process step by step to help you grasp how to calculate your tax and demystify the concept of fictitious gains.

So, what are fictitious gains?

The idea behind them is straightforward: as your wealth grows, the presumed returns on that wealth also increase. Now, here's where it gets a bit tricky but bear with us. This system operates on a progressive tax scale, ranging from a minimal 0.01% to a maximum of 6.17%. However, keep in mind that this system is on its way out by 2027.

Let's break it down even further. In each category, there's a specific percentage yield. These percentages are then averaged based on the assets you own. This weighted average yield is applied to the total assets exceeding the personal exemption limit of €57,000. This calculation determines the taxable benefit, and it's subject to a fixed tax rate of 32%.

The Calculation Method

Starting from January 2023, your assets will fall into one of three categories: bank deposits, other assets, or debts. The percentage yield for each category is a key factor in determining the taxable benefit. Here's a breakdown of the deemed yields for 2023 and 2024:

Let's illustrate the process with an example:

1. Total Assets: You have €60,000 in assets that you need to consider for fictitious gains tax.

2. Exemption Limit: The personal exemption limit for 2023 is €57,000. Subtract this from your total assets: €60,000 - €57,000 = €3,000.

3. Category and Percentage Yield: Let's say all your assets fall under the "All Other Assets" category. For 2023, this category has a percentage yield of 6.17%.

4. Assumed Return Calculation: Apply the percentage yield to the remaining €3,000.

Assumed Return = €3,000 * 6.17% = €185.10

5. Taxable Benefit Calculation: Apply a fixed tax rate of 32% to the assumed return.

Taxable Benefit = €185.10 * 32% = €59.23

So, in this example, you would be taxed on a presumed gain of €65.35 based on the fictitious gains system.

Specific Crypto Activities

Mining and Staking Tax

While official statements from the Belastingdienst on the taxation of mining and staking rewards are pending, it's advisable to declare them under Box 1. Kryptos reports provide figures for both methods, allowing you to choose the most favourable for lower tax results.

Liquidity Mining, Bounties, Masternodes, and More

Similar to mining and staking, specific crypto activities like liquidity mining, bounties, and masternodes should be declared under Box 1 until official statements provide clarity. income tax breakdown here.

Hardforks and NFTs

Hardforks are considered part of your assets and fall under Box 3. NFTs, in general, are also part of your assets, but those considered works of art might be exempt from declaration.

Taxation Beyond Buying and Selling

Buying and Selling Crypto

Buying crypto itself is not a taxable event. The tax is applied to your overall assets, savings, and investments on January 1st of the tax year.

Gifting and Inheritance

Gifting or inheriting crypto is tax-free up to certain limits. A general exemption of €3,244 exists, which increases to €6,604 for gifts between parents and children.

Tax Deadlines in the Netherlands

The Dutch tax year begins on January 1st and ends on December 31st. The tax season runs from March 1st to May 1st of the following year. 

File your returns through the online tax portal MijnBelastingdienst. 

Ensuring timely submission is crucial to avoid penalties.

Use a Crypto Tax app like Kryptos

Kryptos offers comprehensive solution for calculating crypto taxes for Netherlands investors. By offering figures for both calculation methods and not declaring staking and lending rewards under Box 1, Kryptos aims to optimize your tax outcomes.

Sign up for a FREE Kryptos account now by following these steps: 

1. Sign up: Registration DONE IN MINUTES.

2. Select your base country and currency: Choose 'The Netherlands' and 'Euros.'

3. Connect Kryptos to your wallets, exchanges, or blockchains: Kryptos integrates with your favorite Platforms and Services offering over 3000+ DeFi protocols for comprehensive tracking.

4. Let Kryptos crunch the numbers: The app calculates the cost basis for each crypto asset, along with capital gains or losses and other relevant financial aspects.

5. Ta-da! Your data is collected, and your full tax report is generated: Explore your tax summary on the Kryptos platform.

6. Download your crypto tax report: Upgrade to a paid plan for downloading the Complete Tax Report or the End of Year Holdings Report, ideal for Dutch investors.

7. Send your report to your accountant or complete your Tax Return yourself: Use the generated file for your Self Assessment Tax Return or share it with your accountant for a seamless tax filing process.

FAQs

1. Are cryptocurrencies taxable in the Netherlands?

Yes, according to the Dutch Tax and Customs Administration (Belastingdienst), cryptocurrencies are considered taxable assets. Much like stocks and equities, crypto is treated as a personal asset, and its taxation is based on the presumed increase in value.

2. How is crypto taxed in the Netherlands?

In the Netherlands, crypto assets are taxed on the presumed increase in value from the beginning to the end of the financial tax year. This means that even holding onto your crypto, commonly known as HODLing, is subject to taxation. The tax is not directly applied to the gains from selling or exchanging crypto but on the overall portfolio value on January 1st of the tax year.

3. Which boxes matter when reporting crypto to Belastingdienst?

When reporting your crypto to the Belastingdienst, you'll primarily deal with two boxes: Box 1 for taxable income from work or home ownership, and Box 3 for benefits from savings and investments. Learn which activities may fall under each box for precise reporting.

4. How are fictitious gains calculated in Dutch crypto taxation?

Fictitious gains are calculated based on a progressive tax scale, ranging from 0.01% to 6.17%. We break down the calculation process step by step, illustrating how assets exceeding the personal exemption limit are subject to a fixed tax rate of 32%.

5. What are the tax implications of specific crypto activities?

Learn about the taxation of mining, staking, liquidity mining, bounties, masternodes, hardforks, and NFTs. Understand which box these activities should be declared under until official statements provide clarity, and explore the income tax breakdown for specific crypto endeavors.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!