Crypto’s terrible, horrible, no good, very bad month The Terra/Luna debacle has sent shockwaves through the crypto world Stablecoins and crypto stalwarts alike are taking a massive hit Over the course of a week in early May, several things happened in quick succession: the algorithmic stablecoin UST, supposedly fixed at one USD, depegged from the dollar. It […]
Can I trade Bitcoin and cryptocurrency in the Netherlands?
Introduction to Bitcoin and cryptocurrency trading in the Netherlands
The Netherlands sits comfortably within the Coincub top ten with a high overall score for its institutional outlook towards cryptocurrency and blockchain technology, plus a high number of virtual asset service providers operating (VASPs). It also scores well for the above-average number of ICO-funded start-ups and Bitcoin nodes. This high-tech, money-savvy country is let down a little by the faltering government commitment to crypto, but its private sector pushes ahead regardless. New AML laws are also being implemented in line with EU directives.
The Netherlands gets a high score for its mix of wide cultural acceptance of crypto. It is open to investing and people can spend crypto unhindered.
Bitcoin tax in the Netherlands
Income tax Netherlands
The Dutch crypto tax authority, the Belastingdienst, are the people who will want an account of your crypto trading or investing as part of your yearly accounts. There are guides for tax on crypto but like most countries, there are areas that aren’t clear-cut or easy to understand.
Cryptocurrency trading is treated as property and taxed as capital gains in The Netherlands. However, the basis of your trading can only be carried back to January 1st of the given tax year, and it resets again each tax year on January 1st so you’ll have tax on gains or losses based on the change in value over the year. Put another way, if you buy a cryptocurrency during the tax year, you are taxed on any gains it makes between the time of acquisition and the end of the tax year. All of your gains and losses are reportable on your tax return and your tax brackets for capital gains on property are determined by your net gain minus losses from the current tax year only.
If you’re buying and selling on a business basis, then separate Netherlands crypto tax rules apply and your cryptocurrency gains would be taxed as income like any other business activity. What level of trading qualifies as a business, however, is something you need to get advice on.
Netherlands crypto tax relief
Needless to say, you’ll have to pay tax on your trading so you’ll need to keep records and some crypto exchanges Netherlands are more advanced in helping you do this. As with most countries, holding bitcoin in your wallet and sitting on them or transferring them between wallets incurs no tax, but make sure you aren’t getting confused –it’s easy to do- between transferring them, transacting them, or disposing of them.
Tax when moving residency
As with any income, your crypto will come under the tax laws of the country you become legal resident. If you move outside The Netherlands but are still a resident make sure you have detailed transaction reports about your purchases and sales across all exchanges you used. If you set up a business to trade crypto, that business will come under the tax laws of the country it operates from.
Tax on mining
Mining is fantastically complicated and unless you’re a technical specialist it is beyond the scope of most individuals. To bring things back to earth, mining for bitcoins or any other cryptocurrencies is, you guessed it, a taxable event. In The Netherlands, mining of crypto by individuals is taxed as other income and the taxable amount is the net profit you make on your mined coin.
Cryptocurrency trading and mining are typically treated as property and taxed as capital gains in The Netherlands. Unlike other countries that tax crypto as property, however, the cost basis can only be carried back to January 1st of the given tax year, and it resets again each tax year on January 1st. So, if you are mining bitcoin, you are taxed on the sale price of your crypto at the time of disposition minus the costs associated with mining it.
Crypto financial services in the Netherlands
Fin services – retirement planning
Investing in crypto has become increasingly recognized by Dutch financial institutions. However, cryptocurrency is not generally recommended for pension plans and retirement funds due to risk and volatility. The situation is changing all the time.
Fin services – banking
De Nederlandsche Bank NV (DNB), the Dutch central bank, has actively registered a number of companies to provide cryptocurrency services in line with the EU Anti-Money Laundering Directive.
Fin Services – Defi
Defi has some way to go in most countries, although the leading Dutch Bank, ING stated that it saw increasing opportunities with regard to digital assets with a keen focus on developing blockchain technology. The bank is already involved in a number of blockchain initiatives.
Using Bitcoin in the Netherlands
Bitcoin is on the up in The Netherlands and Arnhem is one city that has a reputation for its acceptance of crypto, with one of the highest concentrations of places accepting bitcoin worldwide. The way is open to dentistry (as usual), buying property, holidays, and entertainment. Several world brands accept Bitcoin payments including, most famously, Microsoft and Starbucks. In most cases, it is possible to buy vouchers with your crypto that may then be indirectly used with participating outlets and there is an ever-expanding number of bitcoin ATMs in service.
If you’re feeling generous, you can gift crypto but it is subject to a gift tax wherever and however you store or trade your currencies. The Netherlands levies gift and inheritance tax on assets gifted by or inherited from individuals resident in The Netherlands, but you can gift to a recognized charity or non-profit organization and most Netherlands crypto exchanges will be able to advise on gifting your coins.
Crypto regulation in Netherlands
Netherlands Bitcoin regulation
Legal – existing crypto legislation
Trading bitcoin in The Netherlands is well-advanced and the country has a healthy acceptance of bitcoin and other cryptocurrencies. The country offers plenty of choices when selecting a Netherlands crypto exchange and, as a Dutch resident/user, you can choose from platforms based at home or overseas. Buying, selling, and trading bitcoin is all a question of what level you wish to enter the activity, and there are advantages and disadvantages to choosing a home-based or overseas platform. Using Dutch exchanges means that buying bitcoin with euros is easier and using local payment methods is probably simpler.
Legal – forthcoming crypto legislation
Generally speaking, cryptocurrencies are considered legal across the European Union, but Netherlands’ crypto exchange regulations depend on individual member states. Regulations may vary by member-state, and by compliance with the European Banking Authority (EBA), European Commission (EC), European Central Bank (ECB), European Insurance & Pension (EIOPA), and European Supervisory Authority for Securities (ESMA). Cryptocurrency taxation also varies but many member-states charge capital gains tax on cryptocurrency-derived profits at rates of 0-50%.
Want to know the best countries in the world for doing business, where crypto tax implications are more favourable, which countries have the most progressive crypto legislation? The Coincub rankings are already an indispensable part of the crypto and blockchain world. Find out how Coincub can provide you orgnaisation with information and analysis tailored to your specific needs and/or to meet your planned activities.
$51pcs / Last report (#1)
Your Coincub report: “Best countries for doing crypto business” can be downloaded after the payment is successful.
Subscribe to our newsletter, you are in very good company
This is not financial advice. Coincub is an independent publisher and comparison service. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. This space changes rapidly and evolving, so please make sure to do your own research. Although we do our best to provide you the best information, we cannot guarantee the accuracy or applicability of any information on this site or in regard to your individual circumstances.