The Dutch government is inviting public feedback on a proposed crypto legislation aimed at requiring crypto service providers to collect and report user data to the Dutch tax authority, aligning with European Union (EU) guidelines. The Netherlands Ministry of Finance issued a press release detailing that the bill seeks to enhance transparency in cryptocurrency ownership to help curb tax evasion.
The Ministry emphasized that these regulations will not place extra burdens on crypto holders, who are already mandated to report their holdings to the Dutch tax agency, the Belastingdienst.
Dutch Tax Agency’s Role in EU-Wide Data Sharing
This new bill mandates that the Dutch tax agency will share user data gathered by crypto service providers about EU residents with the respective tax authorities in other EU countries. This framework aligns with the EU’s crypto tax reporting standards set by DAC8, enacted last year, and aims to simplify compliance for crypto service providers, requiring them to report only within the EU country where they’re registered.
Crypto assets held by Dutch residents are already taxed similarly to traditional investments. However, the Ministry highlighted a need for more cohesive oversight within the EU to ensure balanced reporting across the sector.
Folkert Idsinga, the State Secretary for Tax Affairs and Administration, stated, “This bill represents a crucial advancement in crypto taxation.” He further noted that data exchanges will increase transparency, reducing tax evasion and ensuring European governments secure potential tax revenue from crypto assets.
Netherlands Joins 46 Nations in CARF Adoption
The Netherlands joined 46 countries in November by adopting the Crypto-Asset Reporting Framework (CARF) established by the Organisation for Economic Cooperation and Development (OECD). The proposed law also stipulates that data collected by crypto service providers will be shared with non-EU CARF members, such as the U.S., U.K., Canada, Australia, and Singapore.
Stakeholders are encouraged to submit feedback on the draft legislation by November 21. The government intends to introduce the finalized bill to the Dutch House of Representatives by the second quarter of 2025.
Since April 2022, De Nederlandsche Bank (DNB), the Dutch Central Bank, has required crypto service providers to register. The DNB has fined several exchanges for non-compliance; Binance, for example, received a €3.3 million ($3.5 million) fine in 2021 and subsequently ceased operations in the Netherlands in 2022. Coinbase also faced similar fines last year.
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