An often asked question is whether bitcoins are taxed like other assets. As bitcoin is an entirely new form of currency, it is unclear to many whether they should declare their bitcoins to the tax authorities. Here we will explain how bitcoin is taxed for private Dutch users. We will update this text in case there are any changes to the tax rules.
The tax authorities state that bitcoins are considered additional assets:
"Virtual currencies, like bitcoins, are stored on your computer. You can only use these currencies as an online payment method. For these assets you use the value of the 1st of January for the year you are filing your taxes."
Additional assets are taxed in box 3 (saving and investing). The first of January of each tax year is considered the reference date for determining the value of bitcoins. When filing your taxes for 2016, use the value of one bitcoin on the first of January 2016. Bitcoins in your possession are only levied by a property tax. Profit as a result of an increase in price is considered capital gains.
There is tax-free threshold for your capital. For 2016, this amount was set at €24.427. Capital that exceeds this amount is taxed by 1,2%. (Note: new rulesfor capital taxes will be introduced in 2017.)
It is important to indicate that you own bitcoins when filing your taxes. Should your bitcoins appreciate in value without having listed them in your tax return, it could be considered illegally-gained proceeds (i.e. “dirty money”). It might then be difficult to explain where the money came from.
Disclaimer: Bitonic is not a tax adviser, contact your tax adviser for specific tax advice.