How the Netherlands tax cryptocurrency and NFTs

Where the individual acts as an investor: Profits from investing and holding cryptoassets (passively) (including small scale/hobby margin trading, futures, trading etc.) are annually taxed as income from savings and investments (Box 3 taxation). Capital gains in respect of cryptoassets, as such, are in principle not subject to Dutch personal income tax in Box 3. Box 3 taxation means that a deemed return of 0.92 per cent - 5.88 per cent of the total of net assets (valued at fair market value) on 1 January – including cryptoassets – exceeding EUR 57,000 must be reported as income, unless the amount of the actual income and (un)realised capital gains is lower than such deemed return in which case that actual return must be reported as income. The deemed (or actual, if lower) return is taxed at 36 per cent. The system of Box 3 taxation is under scrutiny following landmark High Court cases of 24 December 2021 and 6 June 2024.

Where the individual acts as a trader: When an individual carries on a business in the context of crypto (investing and actively trading beyond a mere hobby) and objectively may expect to derive a profit from that business, the individual is taxed on income (gains) at ordinary rates (8.17 per cent - 49.50 per cent) (Box 1 taxation).

With reference to Question 1 above, cryptocurrency is generally included in the assets to which income taxation from savings and investments applies whereby income is determined on the basis of a deemed (or actual, if lower) return on the fair market value of all the taxpayer’s Box 3 assets (including cryptocurrency) on 1 January. As such, cryptocurrency is, effectively, subject to a form of annual valuation, but it is not a traditional mark-to-market system where gains and losses are included in the income annually.

All income (gains) is included in the taxable profit calculation. This includes any type of income (investing, trading, mining, staking, block rewards). The tax rate is 25.8 per cent (19 per cent on profits up to €200,000).

In the case of Box 3 taxation, using cryptocurrencies to pay for goods or services is not a taxable event. In the case of Box 1 taxation and in the case of corporate taxpayers, payment for the goods by way of a cryptocurrency would be recognised as an expense for the taxpayer. The value of the cryptocurrency at the time of the transaction is recorded as the cost of the goods or service. This would generally result in an expense deductible from income, thereby reducing the taxable profit/income or be considered an investment in an asset and a reduction of taxable income/profit through depreciation/amortization.

Whether mining is a taxable event for income tax purposes depends on whether it forms part of a business activity. If not, the proceeds from the mining are assets that will be added to the asset base of Box 3. If it is foreseeable that the mining will not be loss-making in the long run, typically it’s treated as income from other activities, and taxed as Box 1 income (compare Question 1 above).

For corporate taxpayers, cryptocurrency received from mining is subject to corporate income tax based on their market value upon receipt.

Generally Box 3 taxation, unless the taxpayer is a trader (compare Question 1 above). For corporate taxpayers, cryptocurrencies received by airdrop would be subject to corporate income tax based on their market value upon receipt.

Generally Box 3 taxation, unless the taxpayer is a trader (compare Question 1 above). For corporate taxpayers, cryptocurrencies received from staking would be subject to corporate income tax based on their market value upon receipt.

Lending of cryptocurrencies follows the treatment of an ordinary loan. Either the loan is an asset subject to Box 3 taxation (and the interest is not taxed separately), or the loan is subject to Box 1 taxation, in which case the interest is taxed (compare Question 1 above).

For corporate taxpayers, arguably lending cryptocurrencies is not treated as a taxable disposal. Remuneration from such lending will be treated as income in the same way as income from any other loan and recognised on an accruals basis.

Box 3 taxation, unless the taxpayer is a trader (compare Question 1 above). For corporate taxpayers, a hard fork should generally be treated as a taxable disposal.

This is treated as any other form of remuneration, i.e., the taxable wage for the individual equals the value of the cryptocurrencies on the day of receipt.

Gifts of cryptocurrencies made by a resident (or deemed resident) of the Netherlands are subject to gift tax at rates between 10 per cent and 40 per cent of the value of the cryptocurrencies received on the date of the gift. The actual rate depends on the level of connection between the donor and the donee and is subject to certain exemptions.

A reward in a game is not taxable itself but would need to be added to the assets base for Box 3 taxation purposes, unless it is done professionally in which case the reward is taxed under Box 1 (compare Question 1 above).

For a non-trading investor, tax deferral is not relevant (Box 3 taxation). For a trader and corporate taxpayers, there are uncertainties as to the applicable tax treatment, although, generally, no deferral would be available if the cryptocurrencies serve as cash or similar assets.

No, except for very specific cases of tokenisation of real property assets.

It is compulsory to declare the possession of cryptocurrency in the annual tax return, just like any other asset. The taxpayer may be subject to a fine of up to 300 per cent of the tax payable if the relevant income with respect to the cryptocurrency is incorrectly declared. In the case of a deliberate failure to declare, criminal prosecution may follow.

The EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules, which will come into effect in 2026, will require all service providers, of whatever size and wherever located, to report on crypto-asset transactions carried out by clients residing in the EU. The Netherlands has published the draft Act for implementation of DAC8 in the Netherlands in October 2024, subject to consultation. This implementation Act has not yet been adopted.

They should be treated either as outside the scope of VAT or as exempt for VAT purposes.

There are no specific Dutch corporate tax rules with respect to ICOs. Dutch (tax) accounting rules would generally determine their tax treatment.

If the tokens qualify as security tokens, the issue should have no direct tax consequences for the issuer. For other tokens, the treatment depends on the obligations of the issuer towards the subscribers. If there are no obligations, the issue proceeds are immediately taxable. If there are obligations towards the subscribers, the issuer would either need to record an obligation (equal to the proceeds) or would need to record a deferred liability (pre-paid income) when the issue price is the consideration for future services or the delivery of goods, which will become taxable when the services are provided or the goods are delivered.

The issue of security tokens is not subject to VAT. Obtaining a voucher is not likely to be subject to VAT itself. Only when the tokens/voucher are exchanged for goods or services, will VAT become due.

No.

For a Box 3 (passive) investor, the creation of an NFT would not be reportable. For a trader or miner, development costs would be deductible or may have to be capitalised for the purposes of Box 1.

For a corporate taxpayer, development costs would be deductible or may have to be capitalised.

The asset that underlies the NFT would determine the tax treatment. Generally, assets must be taxed in Box 3 (compare Question 1 above). There is, however, an exemption for works of art, which do not have to be declared as taxable assets for Box 3 purposes (unless the taxpayer is an art dealer, which may entail that income derived in connection with the NFT is taxed in Box 1).

For corporates, all income (gains) is included in the taxable profit calculation. This includes any type of income (investing, trading, mining, staking, block rewards). The tax rate is 25.8 per cent (19 per cent on profits up to €200,000.

For a non-trading investor, this is not relevant (Box 3 taxation – see above). For an individual that owns and exchanges NFTs in the context of a business, profit realisation may be relevant.
However, there are uncertainties as to the applicable tax treatment.

Whether a deferral is available depends on the nature of the NFT and the underlying asset respectively. A roll-over of the book value may be available if the exchanged item is replaced by another item that takes the same economic function as the exchanged item.

Gifts of NFTs made by a resident (or deemed resident) of the Netherlands are subject to gift tax at rates between 10 per cent - 40 per cent of the value of the assets underlying the NFTs received on the date of the gift. The actual rate depends on the level of connection between the donor and the donee and is subject to certain exemptions.

A reward of NFTs in a game is not taxable itself but the underlying assets would generally have to be included in the taxable base for Box 3 taxation purposes, unless it is done professionally in which case there would be taxation under Box 1. (compare Question 1 above).

No transfer tax is applicable to the acquisition for consideration of NFTs, unless the underlying asset is real estate (or certain rights in connection with real estate), in which case real property transfer tax is due on the value of the relevant real property.

The rate of real property transfer tax is 2 per cent in case it concerns the primary home of an individual or 10.4 per cent (certain exemptions may apply).

If the NFT represents an underlying asset, it is compulsory to declare the possession of NFTs in the tax return, just like any other asset. For corporates, one would expect NFTs and/ or the underlying asset to be included in the taxpayer’s accounts just like any other asset. There is no specific reporting line for NFTs in the tax return.

The taxpayer may be subject to a fine of up to 300 per cent of the tax payable in the event of an incorrect declaration. In the case of a deliberate failure to declare, criminal prosecution may follow.

DAC8 (and the Dutch implementation thereof) is expected to apply to NFT transactions as well (compare Question 15 above).

There are no specific VAT rules regarding NFTs and, given the absence of clarity regarding their legal characterisation, the VAT treatment is not entirely certain.

As opposed to transactions in cryptocurrencies, transactions with respect to NFTs may not be outside the scope or exempt from VAT. A sale of NFTs should arguably be considered a supply of goods or services.

Arguably, the sale of NFTs should be characterised as electronically supplied services, with the consequence that such sales should be subject to VAT in the jurisdiction where the customer (the acquirer of the NFT) is located.