Netherlands seeks input on cryptocurrency tax monitoring laws to align with EU

The Dutch government wants to harmonize its data collecting standards for cryptocurrency service providers with those of the rest of the EU, claiming that this will “create more transparency.”

The Dutch government has requested public feedback on draft laws requiring cryptocurrency service providers, such as exchanges, to gather and share user data with the local tax office, by European Union regulations.

“The aim of the bill is to create more transparency about the ownership of cryptocurrencies, which can prevent tax avoidance and evasion,” the Netherlands Ministry of Finance said in a news release on October 24.

It said that “nothing will change” for cryptocurrency owners under the proposed laws, since they are already required to file a tax return of their holdings with the country’s tax body, the Belastingdienst.

The proposed measure would require the tax agency to disclose service provider-collected data about residents of other EU countries with their respective tax authorities, as mandated by EU-wide crypto tax reporting standards approved last year known as DAC8.

The guidelines reduce the administrative burden on crypto service providers because “they only have to report in the EU member state where they are registered,” the ministry noted.

“With this bill, we are taking an important step in the taxation of cryptocurrencies,” Folkert Idsinga, state secretary for tax affairs and administration, said in a statement.

He stated that in the future, data exchanges will mean crypto “will become transparent to tax authorities,” which will “prevent tax avoidance and evasion, and European governments will no longer miss out on tax revenues.” In November, the Netherlands became one of 47 countries to implement the Organization for Economic Cooperation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF).

The proposed legislation also states that crypto service  provider-collected data will be shared with non-EU governments that have signed on to the CARF, which include the United States, the United Kingdom, Canada, Australia, Singapore, and others. Opinions, suggestions, and comments on the proposed rules are due by November 21, and the government plans to submit the measure to the House of Representatives in the second quarter of 2025.

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