The Netherlands has announced its intention to apply tax monitoring rules to virtual currencies, in line with the European Union's tax reporting rules for digital currencies. As an EU member state, the Dutch government is obliged to accept and apply new reporting obligations, a mechanism to assist EU member states in managing their digital currencies.
New reporting policy
The Dutch Ministry of Finance announced that the government aims to pass a new policy to ensure that activities related to cryptocurrencies are reported and taxed.
Under the proposed legislation, the government will require virtual currency service providers to collect and share user data with the Dutch tax authority from January 2026, according to the tax authority.
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However, the Dutch tax and tax authorities pointed out that digital currency holders are already required to file tax returns for their balances, so this measure will not affect them.
Volkert Issinga, Secretary of State for Taxation and Taxation, said the proposed measures would improve cooperation between EU member states through the exchange of virtual currency data and transactions, adding that the bill would build on the important work done by the Dutch government regarding virtual currency taxes. It has become clear that this initiative is considered to be a significant initiative.
“This will help fight tax avoidance and evasion and ensure that European governments no longer miss out on tax revenue,” Idsinga said.
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The new rules require digital asset service providers to submit user data of individuals who are residents of EU member states. Data must be submitted to the Dutch tax administrator and may be shared by the tax authority with other tax authorities across the regional bloc.
public feedback
The Dutch government said it would like to know the public's opinion on the proposed tax monitoring law. There will be a consultation period until November 21, during which the public will be asked to express their concerns and reactions to the new policy.
Feedback gathered during the consultation will be used to draft the final version of the bill. The tax authority aims to introduce the bill to the House of Representatives next year.
EU virtual currency tax reporting
In October 2023, the EU introduced DAC8. DAC8 is a crypto taxation rule that requires all crypto service providers in the EU to provide user data to their respective tax authorities.
The Dutch government said DAC8 will enable the exchange of data between tax authorities within the EU, limiting the administrative burden on virtual currency service providers as they only need to communicate with the appropriate authorities in the country of registration.
“Without this DAC8 Directive, providers could be required to provide information from any member state,” the Dutch tax authorities explained.
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