The Dutch government is seeking public input on proposed legislation that would require cryptocurrency service providers, such as exchanges, to collect and share user data with the local tax authority. This move is in line with European Union regulations.
The main objective of the bill is to enhance transparency regarding the ownership of cryptocurrencies, which can help prevent tax avoidance and evasion, according to the Netherlands Ministry of Finance. It emphasized that the proposed rules would not introduce any changes for crypto owners, as they are already obliged to report their holdings to the country’s tax authority.
Under the new bill, the tax agency would share data collected by service providers about residents of other EU countries with the tax authorities of those nations. This requirement is in compliance with the EU-wide crypto tax reporting rules, known as DAC8, which were adopted last year. These rules aim to reduce the administrative burden on crypto service providers by only requiring them to report in the EU member state where they are registered.
Although Dutch crypto owners are already subject to taxation on their holdings, the Finance Ministry highlighted that EU tax authorities currently lack sufficient insight into the crypto market, resulting in an uneven playing field in the financial sector.
Folkert Idsinga, the state secretary for tax affairs and the tax administration, described the bill as an important step in the taxation of cryptocurrencies. He explained that the exchange of data will make crypto assets transparent to tax authorities, thereby preventing tax avoidance and evasion and ensuring that European governments receive their due tax revenues.
The Netherlands was one of the 47 countries that implemented the Crypto-Asset Reporting Framework (CARF) from the Organisation for Economic Cooperation and Development (OECD) in November. The proposed legislation also stipulates that the data collected by crypto service providers should be shared with non-EU countries that have signed on to the CARF, including the United States, the United Kingdom, Canada, Australia, Singapore, and others.
Interested parties have until November 21 to provide opinions, advice, and comments on the proposed rules. The government aims to submit the bill to the country’s House of Representatives in the second quarter of 2025.