Crypto Tax Legislation & Law in the Netherlands

In the Netherlands, no specific legislation is issued for the taxation of crypto-assets. Therefore, general tax principles apply. Investing in and holding crypto-assets (normal asset management), other than in the scope of a professional activity carried out by an investor, should fall within the scope of Box 3 for the purposes of personal income tax (PIT). In Box 3, a resident taxpayer is taxed on the basis of a deemed return on the taxpayer’s yield basis (rendementsgrondslag) at 1 January if, and to the extent that, the yield basis exceeds a certain statutory threshold value (2023: EUR 57,000), rather than on the basis of the actual income received or capital gains realised with the crypto-assets. Such yield basis is determined as the fair market value of certain qualifying assets held by the holder of the crypto-assets, less the fair market value of certain qualifying liabilities at the beginning of the calendar year. The fictitious annual return deemed to be derived from the yield basis will be taxed at a flat rate of 32% (2023). The Dutch Government is examining whether a new Box 3 system may be introduced as of 2027 whereby the actual returns will be taxed; or alternatively, a refinement of the current system based on deemed returns may be a feasible option.

If the crypto-assets are within the scope of Box 3, the exchange of crypto-assets for a conventional FIAT currency is not taxed in the Netherlands.

If the crypto-assets are within the scope of Box 3, the exchange of crypto-assets for goods/services does not lead to PIT in the Netherlands.

In case the taxpayer aims to achieve a return on the crypto-assets that exceeds what can be reasonably expected from normal asset management (actively trading beyond normal asset management), or generally carries out the transactions within the scope of a professional activity, the crypto-assets should generally be included in Box 1 for PIT purposes. The actual return would become taxable in Box 1 at ordinary (progressive) rates of up to 49.5%. This should be assessed on a case-by-case basis.

As Box 3 taxation is based on a fictitious return deemed to be derived from the crypto-assets, regardless of the actual return, any losses made on the crypto-assets cannot be offset as such (considering that the actual return is not relevant). However, such losses may have an indirect effect as they may lead to a reduction of the taxpayer’s yield basis (as per 1 January) on which the taxable deemed return is calculated. Losses may be directly recognised for Dutch PIT purposes if the crypto-assets fall within the scope of Box 1.

N/A.

The asset that underlies the NFT should generally determine the tax treatment of the NFT. Generally, investments in assets should be taxed in Box 3 (see the answer to Q1). An exemption may apply if the NFT relates to a work of art that is not held as an investment. When NFTs are traded with the aim to achieve returns on the NFTs that exceed what can be reasonably expected from normal asset management, or if the trading occurs within the scope of a professional activity, the income derived from (trading in) the NFTs should be included in Box 1 for PIT purposes.

Mining crypto-assets may fall within the scope of Box 1 for PIT purposes, provided that the mining activities can be considered a source of income or are generally taking place within the scope of a professional activity. As a lot of computer capacity is required for mining, the costs associated with this are often so high that it is generally assumed that mining is loss-making in the long run which makes it difficult to consider mining as a source of income for PIT purposes (on the basis that a return on investment is pursued, which exceeds what can be expected in the case of normal asset management). However, if the proceeds from mining crypto-assets would exceed the costs, there may be a source of income which may be taxed in Box 1 against ordinary rates of up to 49.5%. If not, the assets resulting from the mining activity will become part of the yield basis of Box 3 and will not be taxed separately.

Staking should generally be treated as normal asset management and should fall within the scope of Box 3 for PIT purposes, which means that the actual income derived from staking is not taxed separately. (See Q1.) This may be different if the staking activities are considered to exceed normal asset management (e.g. professional trading), or are taking place in the scope of another professional activity, which means that the income would become subject to taxation in Box 1 against a maximum rate of 49.5%.

In principle the tax treatment of the different types of crypto-assets should follow the existing concepts and classifications in the Dutch tax regime. For instance, employment income paid in crypto-assets is treated similar to regular employment income in kind and is subject to Dutch wage tax and social security payments. Lending of crypto-assets follows the tax treatment of an ordinary loan. The Dutch tax treatment of the different types of activities with crypto-assets as mentioned above (e.g. farming, lending etc.) mainly depends on whether the performed activities are to be considered normal asset management (Box 3) or aim to achieve a return on crypto-assets that exceeds what can be reasonably expected from normal asset management or take place within the scope of a wider professional activity (Box 1). (See previous questions for the difference in tax treatment between Box 1 and Box 3.)

It is mandatory to declare the ownership of crypto-assets in the PIT return. Generally, Dutch taxpayers may be fined with material fines of up to 300 per cent and, in case of a repeated deliberate failure to declare, in certain cases criminal prosecution may also follow. Aside from this standard declaration requirement in the PIT return, there are no specific tax reporting obligations with respect to crypto-assets.

Not at this time.