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.
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
Spend
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.
Gifting crypto
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.