- New regulation aims to enhance transparency, aligning crypto transactions with traditional financial oversight to prevent tax evasion.
- Public feedback solicited on the draft law from October 24 to November 21, 2024, ensuring comprehensive stakeholder input.
In response to growing concerns over tax evasion, the Dutch government has introduced a draft law requiring crypto service providers to collect and share user data with the Tax Authority, effective from January 1, 2026. This legislation aims to enhance transparency in cryptocurrency transactions to deter tax avoidance.
Beginning October 24, 2024, the public can provide feedback on this proposal, which obligates crypto service providers to verify and disclose user information. This measure is intended to align cryptocurrency transactions more closely with existing financial oversight mechanisms, thereby preventing tax evasion. Stakeholders can submit their comments until November 21, 2024.
State Secretary for Taxation and Tax Administration, Folkert Idsinga, stated that this initiative would facilitate improved cooperation and data exchange among EU nations, making cryptocurrency transactions more visible to fiscal authorities. This is expected to prevent potential tax losses across European jurisdictions.
Folkert Idsinga, State Secretary for Taxation and Tax Authorities: “With this draft law we are taking an important step in the taxation of cryptocurrencies. In the future, EU member states will be able to cooperate better thanks to data exchange and transactions with cryptocurrencies will be transparent for tax authorities. This will prevent tax avoidance and evasion and ensure that European governments no longer lose tax revenues.”
Cryptocurrencies, akin to traditional bank deposits and investments, are taxable assets. However, the lack of sufficient regulatory visibility has hitherto placed cryptocurrencies at a disadvantage in financial equity.
The new rules are part of an adaptation of the European directive (DAC8), compelling EU-based crypto service providers to gather and report essential user data within their registered member state. This regulation simplifies the compliance process by standardizing the reporting requirement across the EU, rather than each state mandating separate reports.
The internet consultation phase is critical for incorporating public and stakeholder input into the legislation before its presentation to the Dutch House of Representatives in early 2025. This process underscores the government’s commitment to refining the proposal through broad-based feedback.
This legislative move is part of a broader strategy to integrate cryptocurrency more fully into the regulated financial system, ensuring equitable treatment with other financial assets. By standardizing oversight, the Dutch government aims to safeguard against financial crimes and ensure fiscal fairness across the burgeoning digital asset landscape.
