The Netherlands is seeking public input on proposed regulations to monitor cryptocurrency ownership in order to bring its tax laws in line with European Union standards.
According to an October 24 announcement from the Dutch Ministry of Finance, the bill would require crypto service providers, including exchanges, to collect, verify, and share user data with the Dutch Tax Administration.
The obligation is scheduled to come into force on January 1, 2026, and is part of a broader EU effort to prevent tax evasion and improve transparency around the ownership of digital assets. The Ministry of Finance called on cryptocurrency service providers and the public to submit their comments by November 21st.
Under the proposed rules, virtual currency providers would have to submit user data for residents of EU member states, which the Dutch Tax Administration would share with other tax authorities in the EU, and which member states adopted last year. This will be in line with the DAC8 directive on virtual currency tax reporting.
DAC8, introduced by the EU on October 17, 2023, requires all cryptographic service providers in the EU to report user data to the tax authorities of the countries where they are registered. The framework is designed to reduce administrative burden, as providers only need to report once in the EU member state in which they are based.
Without this directive, providers could face multiple data requests from EU countries, increasing the administrative burden for encryption service providers.
Additionally, in November 2023, the Netherlands adopted the Organization for Economic Co-operation and Development’s Cryptoasset Reporting Framework, which mandates automatic exchange of information between tax authorities of participating countries.
The proposed Dutch bill will therefore ensure that data collected under CARF will also be shared with non-EU jurisdictions that comply with the framework.
Volkert Issinga, Secretary of State for Taxation and Taxation, said the bill was “an important step in the taxation of cryptocurrencies”, adding that improved data sharing mechanisms would prevent tax evasion and help EU governments collect crypto tax revenues. He added that it helps prevent losses. crypto assets.
The public feedback gathered through the consultation will contribute to the final version of the bill, ensuring that it meets both EU standards and Dutch tax policy objectives. The Treasury intends to submit the bill for consideration in the House of Commons by mid-2025.
EU regulations
The Netherlands will join Denmark in complying with EU crypto tax standards. On October 23, Denmark proposed a bill to tax unrealized gains on cryptocurrencies, which, like the Dutch proposal, complies with DAC8 and CARF standards.
Against this backdrop, the European Union is accelerating its efforts to establish a uniform regulatory framework for the crypto sector across member states, with the adoption of the Market in Crypto Assets (MiCA) Act a key priority.
As part of this effort, member states are also developing domestic laws that are in line with MiCA. For example, the Irish regulator is considering drafting emergency legislation to update Irish regulations ahead of the implementation of MiCA, while Spain is planning early implementation.
MiCA is scheduled to come into force on December 30, 2024.
