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If you are deep into the crypto territory and have no idea how they’re taxed, you’re not alone.
Thousands of resident 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…
Unlike most countries, the Netherlands doesnot have a specific capital gains tax for crypto assets. Instead of taxinggains from the sale of crypto assets, the Netherlands taxes the presumed gainsof crypto assets throughout a tax year.
The presumed gains are calculated based onthe Fair Market Value (FMV) of your assets as reported on January 1. This meansthat simply holding crypto in the Netherlands is a taxable event. The costbasis of your assets is reset on January 1 each year, so the tracing of thecost basis can only go back to January 1 of the previous year.
In the Netherlands, you are required to paytax on the presumed gains of your total assets, and the Belastingdienst (Tax and Customs Administration) always assumes that you generate a gain, never aloss.
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 36% 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 Cryptoassets are reported as Box-1 assets
In contrast to most countries, where thetaxation of crypto assets is triggered by their disposal, the Netherlandsfollows an inclusive tax rule. This means that even if you do not sell ordispose of your crypto assets within a tax year, they are still subject totaxation.
The Belastingdienst requires all residentsto report the value of their assets on January 1st of each year. The cost basisof 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 basisto 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 orheld onto.
Taxes in the Netherlands are divided intothree 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, andit’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 36% regardless of income level. Note that individuals (resident taxpayers) have a personal income tax exemption limit of €57,684.
The presumed gains are calculated based on thepremise 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 rateswhen calculating presumed gains on bank balance, crypto investments, and debts.
Let’s say you reported the total value ofyour assets to be €70,000,
Now since the first €57,684 is exempt fromany taxation, your taxable base is just €12,316 (€70,000 - €57,684).
The presumed gains rate for cryptoinvestments is 5.88%
So presumed gains = 0.0588 * €12,316 =€724.18
Hence, you’ll pay a 36% tax on the presumedgains of €724.18.
Since the Belastingienst doesn't tax theactual gains, but the presumed gains on assets, any losses incurred fromdisposal don’t affect your tax bill in the Netherlands.
Since buying and selling crypto arenon-taxable transactions in the Netherlands, there are no profits to offsetyour losses against.
Therefore, any capital losses incurred in the Netherlandsare simply losses, and you can neither write them off against them again norcarry them forward to the subsequent tax year.
There are provisions in the Dutch cryptotax guidelines that allow you to use your lost or stolen crypto as atax-deductible and reduce your tax bill. However, you need the documents toprove your loss of possession and the negligible chance of recovery of theseassets.
Although there’s no (legal) way to avoidpaying taxes entirely in the Netherlands, there are ways you can claim some taxdeductions and reduce your tax bill
You can give up to €2,690 worth of cryptotax-free in the Netherlands, and the amount doubles to €6,713 if you grant theassets to your children. You can use this to your advantage and lower your taxbill by gifting crypto to your spouse or children.
When contributing to a public benefitsorganisation (ANBI), philanthropic individuals can lower their taxable incomeby subtracting the value of their donations. It's important to note thatdonations 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 gainsfrom such disposals are non-taxable, there is no requirement for a specializedaccounting method to calculate the cost basis. In the Netherlands, the costbasis is determined as the initial purchase price of the asset for taxpurposes.
In the Netherlands, the cost basis iscalculated 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 theNetherlands when it is reported under Box-1 assets. The following scenariosattract income tax:
Income rates for Box 1:-
Calculating Income for Box-1 assets ispretty straightforward. All you need to do is add the fair market value of thetokens 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-freein the Netherlands:
Here’s a list of taxed crypto transactions in the Netherlands:
The taxability of mining as a source ofincome is contingent on whether it constitutes a business activity. In theabsence of such, the gains from mining are classified as assets that areincluded in Box 3's asset base.
However, if it can be anticipated that themining activities will yield profit in the long term, it is typicallyconsidered as income derived from other sources and falls under the purview ofBox 1 taxation.
Interestingly, staking rewards arecategorised as Box-3 assets, unlike mining rewards. The value of the tokensreceived is added to other assets and investments of the taxpayer and taxed ata flat rate of 36%.
The taxes around NFTs depend on theunderlying asset of the NFT. Generally, all the assets are to be reported asBox-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 arean art dealer.
As a business, any earnings made from theproduction, sale, or swap of NFTs are automatically included in the tax profitcalculations and are subjected to a tax rate of 19% for profits up to €200,000and a flat rate of 25.8% above that.
Regarding NFTs, there aren't any clearrules about handling Value-Added Tax (VAT). Because it's unclear what kind ofthing an NFT is, it's hard to know how it should be taxed. Unlikecryptocurrencies, it's possible that buying or selling NFTs might not beconsidered exempt from VAT.
And even though you're buying somethingwhen you get an NFT, it might not be considered a regular purchase of goods.
ICOs are special events that allowinvestors to invest in tokens from unreleased projects in exchange formainstream tokens like Bitcoin and Ethereum. ICOs are similar to IPOs fromtraditional markets.
The Belastingdienst is yet to releasespecific guidance on the taxation of such transactions, although it is highlylikely that any income from such transactions will be categorised under Box-3and will be taxed accordingly.
We do suggest seeking advice from an experiencedtax professional to get a clear picture of how such transactions are taxed.
DAOs are member-owned communities with ashared vision. All the decisions in a DAO are made by the members in theabsence of central leadership.
DAOs are new-age institutions that aim todemocratise decision-making and allow people to have a say in decisions thatdirectly affect them.
DAOs are often called the soul of Web3 and enable membersto earn rewards in multiple ways.
DAO contributors are rewarded for theircontributions to the organisation, similar to how centralised organisations paysalaries to their employees.
They also pay out bounties for one-time projectsand redistribute any profits generated through operations.
The Belastingdienst is yet to releaseguidance on how income from DAOs is viewed from a tax perspective. We suggestseeking advice from a tax expert to better understand how such transactions aretaxed.
DeFi, being a relatively new financialapplication of crypto assets, hasn't been touched upon by the Dutch taxauthorities. 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 usingDeFi protocols, you should consider contacting a Dutch tax consultant andunderstanding the liabilities that entail these DeFi transactions.
Based on the existing crypto taxationguidelines, 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’vebeen involved in the following DeFi transactions, you should consider reportingthem to the Belastingdienst.
In the Netherlands, gifting or inheritingassets, including cryptocurrencies, is exempt from taxation up to €2,690.However, if the gift is received from parents, the tax-free threshold is morethan doubled to €6,713.For charitable donations, individuals can deductthe value of their donations from their taxable income, given that therecipient charity is registered as a public benefits organisation (ANBI). Ifthe donation amount is less than 10% of the individual's annual taxable income,it is considered tax-free.
If you are not a trader, any tokensreceived from airdrops will be considered Box 3 assets by the tax authoritiesin the Netherlands and will be taxed accordingly. In the case of corporations,tokens received are subject to corporate income tax based on the market valueof the assets at the time of receipt.
Since soft forks don’t result in anyadditional tokens, they’re considered non-taxable by the Dutch tax authorities.However, hard forks are a different story. Any additional tokens received aftera hard fork must be reported as a Box 3 asset in the tax form and will attractincome tax unless you’re a trader(Any income made as a trader is reported underBox 1 of the tax form).
In the Netherlands, taxpayers are requiredto submit their tax returns on an annual basis, with the typical deadline beingMay 1st of the subsequent year. It's important to be aware that specific typesof taxes or situations might have different deadlines, so it's advisable tostay informed about any applicable variations.
You can file crypto taxes in theNetherlands through the online portal after you have filled out your tax formwhich is available on the Belastingdienst website. You are required to file your tax return before the May 1deadline. However, you can extendthe deadline to accommodate some unforeseen circumstances.
You can file crypto taxes yourself, througha third-party intermediary like a tax accountant, or using a crypto taxsoftware like Kryptos whichis capable of generating legally compliant tax reports in a matter of minuteswithout you having to lift a finger. Regardless of how you file your taxes, youneed your DigiD toprove 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 overviewof 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:
If you are considered a ‘qualifyingnon-resident taxpayer’ or if you are covered by Dutch social insurance, youwill also need your foreign home’s details:
Deductions (only if you are a‘qualifying non-resident taxpayer’, or if you were living in Belgium, Surinamor Aruba, or if you were covered by Dutch social insurance) You will need proofof payment. For instance:
Other (only if you are a ‘qualifyingnon-resident taxpayer’, or if you were living in Belgium, Surinam or Aruba, orif you were covered by Dutch social insurance)
How to File Crypto Taxes Using Kryptos?
Now that you’re aware of how your cryptotransactions are taxed and what forms you need to fill out to complete your taxreport, here’s a step-wise breakdown of how Kryptos can make this task easier for you:
If you still need clarification regardingthe integrations or generating your tax reports, you refer to our videoguide here.
Although there’s no legal way to avoidcrypto taxes entirely in the Netherlands, you can claim some tax deductions byemploying some of these strategies:
1. Can the Belastingdienst Track CryptoTransactions?
Yes, the Belastingdienst (the Dutch Tax andCustoms Administration) can track crypto transactions like any other financialtransaction. While the transactions are recorded on a decentralised ledger, theidentities of the individuals involved in the transactions can be tracedthrough the use of blockchain analysis tools, especially if the person has usedan exchange or another centralised service to buy or sell cryptocurrencies.
2. Is crypto legal in the Netherlands?
Yes, owning, buying, and sellingcryptocurrencies is legal in the Netherlands. The Dutch government has beenrelatively open to new financial technologies, including cryptocurrencies andblockchain.
The legal status of cryptocurrencies in theNetherlands is that they are not recognised as legal tender, but they areconsidered assets. Therefore, any gains or losses from buying, selling orexchanging cryptocurrencies are subject to taxes.
3. Is crypto taxable in the Netherlands?
Crypto transactions are taxable in theNetherlands and the Dutch tax authority Belastingienst has made it pretty clearthat any transactions involving cryptocurrencies, even the ones where you justhold your assets and don’t dispose of them, will attract tax liabilities in theNetherlands.
4. What is the tax rate for capitalgains on cryptocurrencies in the Netherlands?
The Netherlands has a flat tax rate of 36%for all crypto-related gains.
All content on Kryptos serves generalinformational purposes only. It's not intended to replace any professionaladvice from licensed accountants, attorneys, or certified financial and taxprofessionals. The information is completed to the best of our knowledge and weat Kryptos do not claim either correctness or accuracy of the same. Beforetaking any tax position/stance, you should always consider seeking independentlegal, financial, taxation or other advice from professionals. Kryptos is notliable for any loss caused by the use of, or by placing reliance on, theinformation on this website. Kryptos disclaims any responsibility for theaccuracy or adequacy of any positions taken by you in your tax returns. Thankyou for being part of our community, and we're excited to continue guiding youon your crypto journey!
