Dutch Tax Authority Seeks Public Input on Crypto Data Reporting Bill

The Dutch government has invited public feedback on proposed legislation that will mandate crypto service providers to gather and disclose user information to the local tax authority, in alignment with European Union regulations.

According to a recent press release from the Netherlands Ministry of Finance, the primary objective of the bill is to shed light on cryptocurrency ownership, aiming to curb tax evasion and avoidance practices.

The Ministry noted that the proposed regulations would not impose additional obligations on crypto holders, as they are already obligated to report their holdings to the Dutch tax authority, the Belastingdienst.

Dutch Tax Agency to Share Data With Tax Authorities

Under the new bill, the Dutch tax agency would share data collected by service providers concerning residents of other EU nations with the respective tax authorities of those countries, in compliance with the EU-wide crypto tax reporting guidelines set forth in DAC8, which were enacted last year.

The approach is designed to streamline administrative processes for crypto service providers, as they are only required to report to the EU member state where they are registered.

Dutch cryptocurrency owners are currently subject to taxation on their crypto holdings similar to traditional investments.

However, the Finance Ministry highlighted a lack of comprehensive insight among EU tax authorities regarding cryptocurrencies, leading to an imbalance in the financial sector.

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

He added that through data exchanges, cryptocurrencies will be more transparent to tax authorities, ultimately deterring tax evasion and ensuring that European governments do not miss out on potential tax revenues.

Netherlands Joins 46 Nations to Adopt CARF

The Netherlands joined 46 other nations in November in adopting the Crypto-Asset Reporting Framework (CARF) established by the Organisation for Economic Cooperation and Development (OECD).

The proposed legislation also dictates that data collected by crypto service providers will be shared with non-EU countries that have signed onto the CARF, including prominent nations like the United States, the United Kingdom, Canada, Australia, and Singapore.

Stakeholders are encouraged to provide feedback on the proposed regulations by November 21.

The government aims to present the bill to the Dutch House of Representatives in the second quarter of 2025.

De Nederlandsche Bank (DNB), the Dutch Central Bank, introduced registration requirements for crypto service providers in April 2022.

The central bank has since imposed fines on a number of exchanges for failing to adhere to the requirements.

For one, Binance has faced a fine of 3.3 million euros ($3.5 million at the time) for operating without registration after receiving a warning from the DNB in August 2021.

In June 2022, Binance announced its decision to cease operations in The Netherlands after an unsuccessful attempt at registration.

Likewise, Coinbase was fined €3.3 million ($3.6 million) by the Dutch Central Bank (DNB) in June last year for failing to obtain the required registration before operating in the jurisdiction.