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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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BITCOINS
BENEFICIAL TAX REGIME IN THE NETHERLANDS

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.

Example
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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