The primary objective of the bill is to curb tax evasion and avoidance practices.
In accordance with EU regulations, the Dutch government has requested public input on proposed legislation that would require crypto service providers to collect and report user information to the local tax authority.
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 pointed out that since cryptocurrency holders are already required to report their holdings to the Belastingdienst, the Dutch tax authority, the proposed regulations would not place any new duties on them.
Dutch Tax Agency to Share Data With Tax Authorities
In accordance with the EU-wide crypto tax reporting guidelines outlined in DAC8, which were implemented last year, the new bill would allow the Dutch tax agency to share information gathered by service providers about citizens of other EU countries with the relevant tax authorities of those countries.
Since crypto service providers only need to report to the EU member state in which they are registered, the strategy aims to simplify administrative procedures for them.
Like with traditional investments, Dutch cryptocurrency owners are currently liable for taxes on their holdings.
However, the Finance Ministry pointed out that there is an imbalance in the financial sector as a result of EU tax authorities’ lack of thorough understanding of cryptocurrencies.
Folkert Idsinga, state secretary for tax affairs and the tax administration, stated, “With this bill, we are taking an important step in the taxation of cryptocurrencies,”
He went on to say that data exchanges will make cryptocurrencies more transparent to tax authorities, which will ultimately discourage tax evasion and guarantee that European governments do not lose out on possible tax income.
Netherlands Joins 46 Nations to Adopt CARF
In November, the Netherlands joined 46 other countries in embracing the Organization for Economic Cooperation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF).
Additionally, the proposed law requires that information gathered by crypto service providers be shared with non-EU nations that have joined the CARF, including well-known nations like the US, UK, Canada, Australia, and Singapore.
By November 21, stakeholders are urged to offer their opinions on the proposed rules.
In the second quarter of 2025, the government hopes to introduce the bill before the Dutch House of Representatives.
In April 2022, the Dutch Central Bank, De Nederlandsche Bank (DNB), imposed registration requirements on cryptocurrency service providers.
Since then, the central bank has fined several exchanges for not meeting the standards.
For starters, following a warning from the DNB in August 2021, Binance was fined 3.3 million euros ($3.5 million at the time) for operating without registration.
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.
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