Cryptocurrencies and the Dutch law

What are Bitcoins and other cryptocurrencies according to the Dutch law?

The court of Overijssel stated on 14 May 2015 that “the Bitcoin can not be regarded as money within the meaning of Section 6.1.11 of the Civil Code, but should be regarded as a means of exchange”. You can read the verdict here.

Conclusion: Bitcoins and other cryptocurrencies are nothing but exchange agents, such as shells, marbles and pebbles.

Are Bitcoins and other cryptocurrencies classified as digital currency by Dutch law?

The WWFT law, the law for the prevention of money laundering and financing of terrorism, contains a definition of digital money. This law requires that something that is classified as digital money should be issued by a central body. Since Bitcoins and many other cryptocurrencies are not issued by a central body but are decentralized, Bitcoins and other decentralized cryptocurrencies are not classified as digital money under Dutch law. Some examples of dezentralized cryptocurrencies are Bitcoin, Monero, Ethereum. So according to Dutch law, these are not covered under the category of digital money.

Does Value-Added-Tax, in Dutch btw but in English VAT, be charged with Bitcoins and other cryptocurrencies?

Bitcoins and other cryptocurrencies are thus designated as exchange agents and if we sell them, also as goods. Typically, companies need to levy VAT on the sale of goods, but when selling Bitcoins and other cryptocurrencies, this is in principle not needed.

The Court of Justice of the European Union has made a verdict on this. When Bitcoins and other cryptocurrencies do not have any other purpose than payment agents, EU Member States should not charge VAT on Bitcoins and other cryptocurrencies. Because there is no added value in fiscal terms.
You can read the verdict here.

Bitcoins and other cryptocurrencies have been given a separate status through this verdict. Cryptocurrencies can not be classified as money, but because they do have the function of money, there is no need to pay VAT.

The effect of Bitcoins and other cryptocurrencies on my income tax in the Netherlands

Bitcoins and other cryptocurrencies are according to the law goods, and these belong to a person’s assets and the assets of a person need to be declared.
In short, You are legally obligated to indicate the value of your Bitcoins and other cryptocurrencies ​​when declaring your tax form.

The value of the Bitcoins and other cryptocurrencies you own must be entered under the heading ‘Capital’ on the Dutch declaration form.
The value you need to enter is the value of your Bitcoins and other cryptocurrencies in euros on January 1 of the fiscal year. For example, if you declare your taxes for the year 2017, you indicate how much your Bitcoins and other cryptocurrencies ​​were worth as of January 1. So you need to indicate how much your Bitcoins and other cryptocurrencies were worth on January 1, 2017.

Ofcourse you can think by yourself, the tax office can not figure out how many Bitcoins and other cryptocurrencies I own and how much they are worth. If you want to convert your Bitcoins and other cryptocurrencies to Euros or Dollars, the tax service may declare that money as an inexplicable capital which could result in penal sanctions.