Tax on crypto earnings in the Netherlands

Owning cryptocurrencies (such as bitcoin) is becoming increasingly popular, also in the Netherlands. Understandable because, sometimes, you can get a high return on this. But what about the tax? This is a logical question to ask, as the Dutch government is not quite sure how they look at cryptocurrency yet. In this article, you can read everything about crypto and tax in the Netherlands.

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Crypto and your tax return

The value of your crypto is not (yet) automatically filled in by the Dutch tax authorities; you are responsible for this yourself. That is why it is useful to know how to declare this ‘passive income’ in your annual tax return.

crypto

Crypto is seen as assets (box 3)

We often get the question: how is the profit on my crypto taxed? In most cases, the Dutch tax office sees crypto as assets. So, you enter the value in box 3, which is good news for your wallet! In the Netherlands, there is no capital gains tax. It means that you do not have to pay tax on the actual return. Read more about the box 3 tax in this article.

It may also be the case that you do not have to pay anything over the profit because there is a tax-free capital (for 2021, this is € 50,000). Is your box 3 capital lower than € 50,000? Then you don’t have to pay tax. Note that this is not only about the value of your crypto but your total assets (think of shares or savings).

Crypto taxed in box 1

Sometimes, your crypto income is taxed in box 1. This is the case when:

  • you have insider trading knowledge;
  • trading is a daytime activity;
  • you are going to ‘mine’ crypto.

The value on 01/01 is decisive!

The amount you have to declare in your tax return is the value on the 1st of January. Are you interested in crypto? Then, you probably know that the value of your portfolio can completely change in one day. Therefore, enter the value of your crypto assets on January 1, 00:00:00 of the year of the declaration.

What happens if you don’t declare your crypto?

As mentioned before, declaring your crypto assets is your own responsibility. Based on new EU guidelines, cryptocurrencies will soon be subject to the exchange of tax data. Therefore, in the future, it can be the case that the value of your crypto will be visible in the pre-completed declaration.

Sometimes, things can go wrong with the tax return. And this can be quite expensive. If you do not declare your crypto, the Dutch tax authorities see this as ‘undisguised capital’. You will probably receive a fine that can be substantial (up to three times the tax owed). In extreme cases, the tax authorities can even prosecute you.

We are happy to help!

Do you have questions about the tax on your assets? Or do you have other tax-related questions? We are happy to help! Please contact us using the details mentioned below.

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