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Bitcoins – Beneficial Tax Regime In The Netherlands

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Jeroen Mijlof

Jeroen Mijlof

Dutch Tax, Accounting and Brexit Expert

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Bitcoins – Beneficial Tax Regime In The Netherlands

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Taxation on Bitcoin and other crypto currencies in the Netherlands for individuals and expats can be very favorable compared to other countries. Generally, assets are taxed in the Netherlands at a 30% tax rate to a deemed rate of return on the net value of assets and debt. Assuming large actual returns on crypto investments this results in a relatively low tax bill. For expats working in the Netherlands who have the so-called 30% ruling, there is not Dutch taxation involved at all. Below we will provide an explanation for both situations.

Box 3

For an individual, being a Dutch tax resident, Bitcoin and other crypto currencies usually qualify as assets and are therefore part of box 3 income. Box 3 income concerns income from savings and portfolio investments. This income is calculated by applying a deemed rate of return depending on the value of the net box 3 value on January 1st of the concerning tax year. This results in the following annual Dutch taxation.

Net Box 3 value Effective tax rate (2018)
Until 70.800 0.605%
70.801 – 978.000 1.298%
978.001 and up 1.614%

A threshold of EUR 30.000 applies to each individual.

Person A owns 10 BTC on January 1, 2017 each worth EUR 925 for a total value of EUR 9.250. Assuming that A has a bank account with EUR 30.000 on January 1, 2017 as well, A will be taxed at a rate of 0.605% for the value of the BTC. This results in a tax payable of EUR 55.

Considering a value at December 31, 2017 of EUR 12.715, having to pay a tax of only EUR 55 for a gain of EUR 117.900 is preferable comparing to an alternative tax system which taxes capital gains.

Keep in mind however, the Dutch box 3 taxation is an annual tax based in the value of your net box 3 value, which also applies in loss years.

Box 3 and the 30% ruling

Expats working in the Netherlands under the 30% ruling can be exempt from the box 3 taxation explain above. The 30% ruling can be requested for employees from abroad working in the Netherlands for up to 5 years.

For more information about the 30% ruling click here.

Would you like more information?

As an expat with the 30% ruling you can opt-in for a special tax status regarding the personal income tax. This is the so-called partial foreign taxpayer status. This status qualifies the taxpayer as non-resident for box 3 income and results in the fact that assets such as bank accounts, portfolio investments and crypto currencies are excluded from scope of the Dutch box 3 taxation.

More information? You can contact call 085 00 30140 from within the Netherlands, or +31 (0)20 2615615 from abroad.

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