Declaring Bitcoin and other crypto assets on your tax return

Cryptocurrencies are digital means of payment and exchange that operate without a central or official counterparty such as a bank. Most crypto transactions are made on ‘crypto exchanges’, where you can use cash to buy cryptocurrencies or exchange them for other cryptocurrencies. You can also ‘mine’ for cryptocurrencies.

The value of some cryptocurrencies is relatively stable because they’re linked to an existing currency such as the dollar or the euro. These are known as ‘stablecoins’. Other cryptocurrencies can experience huge fluctuations in value. In 2025, these coins showed a mixed picture. A good example, the Bitcoin, dropped in value in 2025: from around €90,000 per Bitcoin on 1 January 2025 to around €74,000 on 1 January 2026.

As cryptocurrencies are highly speculative, they are considered a very high-risk investment. Be sure to seek advice on the financial risks.

Cryptocurrencies are taxed differently depending on your situation. In many cases, cryptocurrencies held by private individuals come under Box 3 for income tax purposes. This will be the case if you hold your cryptocurrencies as an investment. This article will explain other situations as well.  

Your tax return

Cryptocurrencies that you hold as private investments usually need to be declared in Box 3 of your income tax return. If your Box 3 assets on 1 January 2025 were higher than €57,684 (as an individual) or €115,368 (as tax partners), you pay tax on income above that threshold. On your income tax return, you declare your cryptocurrencies according to their trading value at midnight at the beginning of 1 January of the tax year in question. To illustrate: if you’re filing your 2025 income tax return, you take the value at midnight at the beginning of 1 January 2025, based on the exchange rate of the exchange platform you used.

Due to various rulings made by the Supreme Court of the Netherlands, there is currently a dual system in Box 3: you can choose between paying tax on an assumed or notional return, or – if this is more favourable - paying tax on the actual return according to the definition given by the Supreme Court.

Tax on assumed return

If you opt for the assumed rate of return, your cryptocurrencies will be taxed as ‘other assets’. This also applies to stablecoins, which do not come under the ‘bank balances’ category. In 2025, ‘other assets’ are taxed according to an assumed rate of return of 5.88%. At a tax rate of 36%, the tax burden on the value of your cryptocurrencies held on 1 January 2025 would be over 2%.

If you acquired your cryptocurrencies after that date, say on 15 April, they are not taken into account when calculating your assumed return for 2025. However, if you held cryptocurrencies on 1 January and sold them later in the year, they will be taxed in Box 3 for the whole tax year. As mentioned previously, you can choose to have your assets taxed according to the actual rate of return if this is lower than the assumed rate of return. You must make a choice each tax year, and that choice applies to all of your Box 3 assets.

Tax on actual return

If you choose to pay tax based on the actual return, you can’t deduct your tax-free allowance from your total assets. The assumed rates don’t apply, and you can declare the actual return in Box 3. This includes direct and indirect returns as well as realised and unrealised gains from selling assets. If your cryptocurrencies have increased in value, you will pay 36% tax on the value increase.

So if your cryptocurrencies achieved a return of 20%, for example, in most cases it would be more beneficial to choose to be taxed on the assumed return. However, in the event of an actual increase in value of 5%, it can be more beneficial to choose to be taxed on the 5% actual return. 

Please note: a return of 0% or a negative return doesn’t result in negative tax in Box 3. You may deduct the loss only from the returns on your remaining assets in Box 3. You may not deduct a loss from other tax years. Due to the drop in 2025 of several high-profile cryptocurrencies, such as Bitcoin and Ethereum, crypto investors would do well to check whether the rebuttal scheme would work to their advantage for the 2025 tax year.

In certain situations, you’ll need to declare your income in Box 1 (income from work and home ownership). This is usually the case if your activities extend beyond ‘just’ investing. The facts and circumstances play a decisive role in this respect. For instance, the Dutch Tax and Customs Administration often doesn’t require you to declare returns from crypto mining. But this may be different if you regularly earn additional income from additional work on top of your investment activities. This could be work as an active crypto trader who spends a lot of time researching crypto, or someone who actively builds a network as a means of investing early in newly launched crypto projects.

Activities beyond those of a regular investor

If your activities extend beyond those of a regular investor, the return from your activities may be deemed income from other work or business profits. In that case, you would declare this income in Box 1 on your tax return. Positive returns are then subject to income tax up to a maximum rate of 49.5% in 2025. It’s a good idea to seek advice from a tax adviser who is knowledgeable about cryptocurrencies.

You may also hold cryptocurrencies as a private limited company rather than as a private individual. In this case, you don’t need to declare the cryptocurrencies in Box 3, as you’ll have to pay corporate income tax and income tax in Box 2. Box 2 applies if you have income from substantial interests, usually because you own at least 5% of the shares in a private limited company.

Profit from your cryptocurrencies

Profit from cryptocurrencies held in a private limited company is subject to between 19% and 25.8% corporate income tax after deduction of costs. If the profit is then paid out to you as a shareholder, in 2025 you’ll pay 24.5% to 31% income tax on that amount in Box 2. Furthermore, a director and major shareholder of a limited company is obliged to pay themselves a ‘market-level’ salary from the business as compensation for the time and work they put into making the business profitable. This salary comes under Box 1.

Income tax on cryptocurrencies differs depending on your situation. If you’re closely involved in crypto as an individual and do more than just invest, or if you hold crypto as a private limited company, you should seek advice from a tax adviser.