In the Netherlands, there are no capital gains tax on crypto. Rather, it is taxed as an asset. Private individuals holding crypto as personal assets don't pay tax on selling or disposing of them, but instead they are taxed annually based on the value of their crypto assets on January 1st under the Dutch wealth tax known as "Box 3".
For professionals involved with cryptocurrencies, gains from trading, mining, and other activities may be subject to Income Tax under Box 1.
To determine whether an individual is conducting activity as a hobby or a business for income tax purposes, the following should be considered:
The expectation of making a profit from the activity.
Investment of sufficient capital into the activity.
Amount of time spent on the activity.
Degree of 'entrepreneurial risk' in the activity.
Tax Rates for Box 1 Income in the Netherlands
If an individual operates a business related to crypto, such as day trading or mining, the gains are treated as regular income and taxed at ordinary rates under Box 1. This is also the case if you receive your salary in crypto. It is considered a form of payment and subject to income tax under Box 1.
The tax rates for Box 1 income increase as your income rises.
Taxable Income (up to state pension age)
up to €73,031
Crypto Tax under Box 3 in Amsterdam
Box 3 taxation covers presumed income from assets, savings, and investments. Cryptocurrencies primarily fall under this box. The Belastingdienst will want to know the value of your assets at the start of the financial year (1st January).
The cost basis of your crypto can only be carried back to the 1st of January of the given tax year, and it resets again each tax year on January 1. This means you pay tax on presumed gains from your entire holdings over the course of the financial year. It assumes you always make a gain from your assets, never a loss.
There is no incentive to hold for long term in the Netherlands, as both short- and long-term holdings are subject to a wealth tax.
Assets from aridrops and hard forks are also declared under Box 3.
Tax Calculation Method in the Netherlands
The Netherlands relies on fictitious returns for the purpose of tax calculation. Fictious returns is based on the idea that the larger your wealth, the greater the overall returns on that wealth would be. It's a progressive tax system and the easiest way to understand the tax rate you'll pay is to average out the different brackets for presumed return.
Buy and Selling Crypto in the Netherlands
Crypto taxation in the Netherlands is quite a bit different than in most other countries, though similar to other countries you are not charged tax for buying crypto with fiat. Rather, you are charged tax on the amount of crypto that you hold at the beginning of the tax year.
When you sell, or dispose of, crypto you are not charged a direct tax on the gains you make from it. Instead, you are charged tax on the amount of savings and investments you hold at the beginning of the tax year. So, if you make a big disposal of crypto and put it into your savings, this is included in the wealth process.
Moving crypto between wallets or exchange accounts of your own ownership is tax free in the Netherlands.