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Curious about crypto taxes in Thailand? Explore the comprehensive guide, from legalities to tracking transactions. Discover how to navigate the evolving tax landscape.
Wondering How to Navigate Crypto Taxes in South Africa? Read our detailed guide on South African Crypto Taxes!
Curious about crypto taxation in Luxembourg for 2023? Our guide covers everything you need to know about crypto taxation in Luxembourg.
If you are deep into the crypto territory and have no idea how they’re taxed, you’re not alone. Thousands of residents struggle to understand the tax obligations these transactions entail and find themselves in the middle of tax complications and legal troubles.
That’s why we put together the most comprehensive crypto tax guide for Netherlands residents, to help them get acquainted with the crypto tax infrastructure. We’ve also touched upon how you can file your crypto taxes conveniently, and the records you need to keep to be able to report these transactions conveniently.
The Dutch tax authorities are yet to discuss the taxation of some crypto applications like DeFi. However, we assure you we will be among the first ones to update this guide and accommodate any new guidelines issued by the authorities in the forthcoming days.
So with that in mind, let’s get started…
Latest Updates/Guidelines
26/06/23 - Updated to accommodate ICO, Gifts and Donation Taxes
26/06/23 - Updated to accommodate DAO Taxes
09/03/24- Updated to accommodate new guidelines and tax rates
Unlike most countries, the Netherlands does not have a specific capital gains tax for crypto assets. Instead of taxing gains from the sale of crypto assets, the Netherlands taxes the presumed gains of crypto assets throughout a tax year.
The presumed gains are calculated based on the Fair Market Value (FMV) of your assets as reported on January 1. This means that simply holding crypto in the Netherlands is a taxable event. The cost basis of your assets is reset on January 1 each year, so the tracing of the cost basis can only go back to January 1 of the previous year.
In the Netherlands, you are required to pay tax on the presumed gains of your total assets, and the Belastingdienst (Tax and Customs Administration) always assumes that you generate a gain, never a loss.
The taxable income is divided into three categories:
Box-1 is for Income from Job/Business
Box 2 is for any substantial Interest earned through crypto
Box 3 is for presumed Gains from assets, investments, and savings
Crypto assets are reported under Box-3, and the tax levied on the presumed gains is called Vermogensrendementsheffing. You pay 32% (36% for 2024) tax on a presumed return on the total value of your assets. However, it’s important to note that there are some instances where you must report crypto assets under Box-1. There are primarily three instances where Crypto assets are reported as Box-1 assets:
In contrast to most countries, where the taxation of crypto assets is triggered by their disposal, the Netherlands follows an inclusive tax rule. This means that even if you do not sell or dispose of your crypto assets within a tax year, they are still subject to taxation.
The Belastingdienst requires all residents to report the value of their assets on January 1st of each year. The cost basis of these assets is considered equal to their market value on that specific day, and it resets exactly one year later.
The tax authorities utilise the cost basis to calculate the presumed gains on the asset throughout the financial year. Taxes must be paid on these gains regardless of whether the assets are sold or held onto.
Taxes in the Netherlands are divided into three categories, and each category has an independent tax rate.
Crypto happens to be in the third category, and the tax levied on Box 3 gains is called the Vermogensrendementsheffing, and it’s equivalent to the capital gains tax charged in other countries.
As mentioned earlier, the Netherlands has no dedicated tax for capital gains. Any gains incurred from crypto assets are grouped as Box 3 gains by the tax authorities and are subjected to a flat tax rate of 32%(36% for 2024) regardless of income level. Note that individual (resident tax payers) have a personal income tax exemption limit of €57,000.
The presumed gains are calculated based on the premise that the bigger your asset base, the more gains you make in a tax year. It’s a progressive system with fictitious gains varying from 0.92% - 6.17% based on the reported value of your assets. One should use the following rates when calculating presumed gains on bank balance, crypto investments, and debts.
Consider the following example:
Let’s say you reported the total value of your assets to be €70,000,
Now since the first €57,000 is exempt from any taxation, your taxable base is just €13,000 (€70,000 - €57,000).
The presumed gains rate for crypto investments is 6.17%
So presumed gains = 0.617 * €13,000 = €802.1
Hence, you’ll pay a 32%(36% for 2024 tax season) tax on the presumed gains of €802.1.
Since the Belastingienst doesn't tax the actual gains, but the presumed gains on assets, any losses incurred from disposal don’t affect your tax bill in the Netherlands.
Since buying and selling crypto are non-taxable transactions in the Netherlands, there are no profits to offset your losses against. Therefore, any capital losses incurred in the Netherlands are simply losses, and you can neither write them off against them again nor carry them forward to the subsequent tax year.
There are provisions in the Dutch crypto tax guidelines that allow you to use your lost or stolen crypto as a tax-deductible and reduce your tax bill. However, you need the documents to prove your loss of possession and the negligible chance of recovery of these assets.
Although there’s no (legal) way to avoid paying taxes entirely in the Netherlands, there are ways you can claim some tax deductions and reduce your tax bill.
You can give up to €3,244 worth of crypto tax-free in the Netherlands, and the amount doubles to €6,604 if you grant the assets to your children. You can use this to your advantage and lower your tax bill by gifting crypto to your spouse or children.
When contributing to a public benefits organisation (ANBI), philanthropic individuals can lower their taxable income by subtracting the value of their donations. It's important to note that donations below 10% of your annual taxable income are exempt from taxes.
As mentioned earlier, in the Netherlands, the disposal of crypto assets does not trigger taxation. Since capital gains from such disposals are non-taxable, there is no requirement for a specialized accounting method to calculate the cost basis. In the Netherlands, the cost basis is determined as the initial purchase price of the asset for tax purposes.
In the Netherlands, the cost basis is calculated based on the value of your assets at the start of the tax year, precisely at 00:00 on January 1st.
Crypto is taxed as income in the Netherlands when it is reported under Box-1 assets. The following scenarios attract income tax:
Paying Income Tax on cryptocurrency is subject to the same rates as your regular Income Tax.
Calculating Income for Box-1 assets is pretty straightforward. All you need to do is add the fair market value of the tokens received from various sources like mining, staking, lending, and DeFi. The figure you end up with is your taxable income base.
Following crypto transactions are tax-free in the Netherlands:
Here’s a list of taxed crypto transactions in the Netherlands:
The taxability of mining as a source of income is contingent on whether it constitutes a business activity. In the absence of such, the gains from mining are classified as assets that are included in Box 3's asset base. However, if it can be anticipated that the mining activities will yield profit in the long term, it is typically considered as income derived from other sources and falls under the purview of Box 1 taxation.
Interestingly, staking rewards are categorised as Box-3 assets, unlike mining rewards. The value of the tokens received is added to other assets and investments of the taxpayer and taxed at a flat rate of 32% (36% for 2024).
The taxes around NFTs depend on the underlying asset of the NFT. Generally, all the assets are to be reported as Box-3 assets, although there’s an exception in the case of art pieces. However, you must report your NFT art pieces under box 1 of your tax report if you are an art dealer.
As a business, any earnings made from the production, sale, or swap of NFTs are automatically included in the tax profit calculations and are subjected to a tax rate of 15% for profits up to €395,000 and a flat rate of 25.8% above that.
Regarding NFTs, there aren't any clear rules about handling Value-Added Tax (VAT). Because it's unclear what kind of thing an NFT is, it's hard to know how it should be taxed. Unlike cryptocurrencies, it's possible that buying or selling NFTs might not be considered exempt from VAT. And even though you're buying something when you get an NFT, it might not be considered a regular purchase of goods.
ICOs are special events that allow investors to invest in tokens from unreleased projects in exchange for mainstream tokens like Bitcoin and Ethereum. ICOs are similar to IPOs from traditional markets.
The Belastingdienst is yet to release specific guidance on the taxation of such transactions, although it is highly likely that any income from such transactions will be categorised under Box-3 and will be taxed accordingly. We do suggest seeking advice from an experienced tax professional to get a clear picture of how such transactions are taxed.
DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by the members in the absence of central leadership. DAOs are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them. DAOs are often called the soul of Web3 and enable members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organisation, similar to how centralised organisations pay salaries to their employees. They also pay out bounties for one-time projects and redistribute any profits generated through operations.
The Belastingdienst is yet to release guidance on how income from DAOs is viewed from a tax perspective. We suggest seeking advice from a tax expert to better understand how such transactions are taxed.
DeFi, being a relatively new financial application of crypto assets, hasn't been touched upon by the Dutch tax authorities. However, it doesn’t imply in any way that the income made from DeFi transactions won’t attract any taxes in the Netherlands.
If you’re making significant gains using DeFi protocols, you should consider contacting a Dutch tax consultant and understanding the liabilities that entail these DeFi transactions.
Based on the existing crypto taxation guidelines, it may be inferred that most DeFi transactions may be considered Box 1 assets and may be subjected to income tax in the Netherlands. If you’ve been involved in the following DeFi transactions, you should consider reporting them to the Belastingdienst.
In the Netherlands, gifting or inheriting assets, including cryptocurrencies, is exempt from taxation up to €3,244. However, if the gift is received from parents, the tax-free threshold is more than doubled to €6,604. When a gift is exchanged between individuals who are not immediate family members, such as friends or distant relatives, the first €2,244 of the gift is exempt from tax. However, any amount exceeding this threshold is subject to a flat tax rate of 30%.
For charitable donations, individuals can deduct the value of their donations from their taxable income, given that the recipient charity is registered as a public benefits organisation (ANBI). If the donation amount is less than 10% of the individual's annual taxable income, it is considered tax-free.
Airdrops
If you are not a trader, any tokens received from airdrops will be considered Box 3 assets by the tax authorities in the Netherlands and will be taxed accordingly. In the case of corporations, tokens received are subject to corporate income tax based on the market value of the assets at the time of receipt.
Forks
Since soft forks don’t result in any additional tokens, they’re considered non-taxable by the Dutch tax authorities. However, hard forks are a different story. Any additional tokens received after a hard fork must be reported as a Box 3 asset in the tax form and will attract income tax unless you’re a trader(Any income made as a trader is reported under Box 1 of the tax form).
In the Netherlands, taxpayers are required to submit their tax returns on an annual basis, with the typical deadline being May 1st of the subsequent year. It's important to be aware that specific types of taxes or situations might have different deadlines, so it's advisable to stay informed about any applicable variations.
You can file crypto taxes in the Netherlands through the online portal after you have filled out your tax form which is available on the Belastingdienst website. You are required to file your tax return before the May 1 deadline. However, you can extend the deadline to accommodate some unforeseen circumstances.
You can file crypto taxes yourself, through a third-party intermediary like a tax accountant, or using a crypto tax software like Kryptos which is capable of generating legally compliant tax reports in a matter of minutes without you having to lift a finger. Regardless of how you file your taxes, you need your DigiD to prove your identity to the tax authorities.
If you don’t have one, you can apply for it here.
Once you have access to your DigiD, you can visit the tax authorities' website and download your electronic tax return report.
Here’s an overview of all the information you need to file your taxes online in the Netherlands.
According to the official website of the Belastingdienst, you should maintain the following records:
Personal details
Income (worldwide)
Property
If you are considered a ‘non-resident taxpayer:
If you are considered a ‘qualifying non-resident taxpayer’ or if you are covered by Dutch social insurance, you will also need your foreign home’s details:
Deductions (only if you are a ‘qualifying non-resident taxpayer’, or if you were living in Belgium, Surinam or Aruba, or if you were covered by Dutch social insurance)
You will need proof of payment. For instance:
Other (only if you are a ‘qualifying non-resident taxpayer’, or if you were living in Belgium, Surinam or Aruba, or if you were covered by Dutch social insurance)
Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:
If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.
Although there’s no legal way to avoid crypto taxes entirely in the Netherlands, you can claim some tax deductions by employing some of these strategies:
1. Can the Belastingdienst Track Crypto Transactions?
Yes, the Belastingdienst (the Dutch Tax and Customs Administration) can track crypto transactions like any other financial transaction. While the transactions are recorded on a decentralised ledger, the identities of the individuals involved in the transactions can be traced through the use of blockchain analysis tools, especially if the person has used an exchange or another centralised service to buy or sell cryptocurrencies.
2. Is crypto legal in the Netherlands?
Yes, owning, buying, and selling cryptocurrencies is legal in the Netherlands. The Dutch government has been relatively open to new financial technologies, including cryptocurrencies and blockchain.
The legal status of cryptocurrencies in the Netherlands is that they are not recognised as legal tender, but they are considered assets. Therefore, any gains or losses from buying, selling or exchanging cryptocurrencies are subject to taxes.
3. Is crypto taxable in the Netherlands?
Crypto transactions are taxable in the Netherlands and the Dutch tax authority-the Belastingienst has made it pretty clear that any transactions involving cryptocurrencies, even the ones where you just hold your assets and don’t dispose of them, will attract tax liabilities in the Netherlands.
4. What is the tax rate for capital gains on cryptocurrencies in the Netherlands?
Netherlands has a flat tax rate of 32%(36% for 2024) for all crypto related gains.
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!
Curious about crypto taxes in Thailand? Explore the comprehensive guide, from legalities to tracking transactions. Discover how to navigate the evolving tax landscape.
Wondering How to Navigate Crypto Taxes in South Africa? Read our detailed guide on South African Crypto Taxes!
Curious about crypto taxation in Luxembourg for 2023? Our guide covers everything you need to know about crypto taxation in Luxembourg.
