The Netherlands is seeking public feedback on proposed regulations for monitoring cryptocurrency ownership, in a bid to align its tax laws with European Union standards.

According to an Oct. 24 announcement from the Dutch Ministry of Finance, the proposed laws would require crypto service providers, including exchanges, to collect, verify, and share their user data with the Dutch Tax Administration.

This mandate, set to take effect on Jan. 1, 2026, is part of broader EU efforts to prevent tax evasion and improve transparency on digital asset ownership. The Ministry of Finance has urged crypto service providers and the public to submit their opinions by Nov. 21.

Under the proposed rules, crypto providers must submit user data for residents of EU member states, which the Dutch Tax Administration will then share with other tax authorities across the EU, aligning with the DAC8 directive on crypto tax reporting adopted by member states last year.

DAC8, introduced by the EU on Oct. 17, 2023, requires all crypto service providers in the EU to report user data to the tax authority of the country where they are registered. This framework is designed to ease administrative burdens, as providers only need to report once within the EU member state in which they are based. 

Without this directive, providers could face multiple data requests from each EU country, increasing the admin burden on crypto service providers.

Further, in November 2023, the Netherlands adopted the Organisation for Economic Cooperation and Development’s, Crypto-Asset Reporting Framework, which mandates automatic exchange of information between tax authorities of participating countries. 

As such, the proposed Dutch legislation will ensure that data gathered under CARF is also shared with non-EU jurisdictions adhering to the framework.

Folkert Idsinga, Secretary of State for Taxation and the Tax Administration, stated that the bill represents “an important step in the taxation of cryptocurrencies,” adding that improved data-sharing mechanisms will help prevent tax evasion and prevent EU governments from losing tax revenue on crypto assets.

Public feedback collected through the consultation will contribute to the final version of the bill, ensuring that it meets both EU standards and Dutch tax policy objectives. The Ministry of Finance intends to submit the bill for consideration by the House of Representatives by mid-2025.

Regulations in the EU

The Netherlands joins Denmark in aligning with EU crypto tax standards. On Oct. 23, Denmark proposed a bill to tax unrealized gains on crypto, which, like the Dutch proposal, complies with DAC8 and CARF standards.

Amidst this backdrop, the European Union has accelerated its efforts to establish a unified regulatory framework for the crypto sector across member states, with the adoption of Markets in Crypto-Assets (MiCA) legislation a key priority.

As part of the effort, member states are also advancing national legislation to align with MiCA. For instance, Ireland regulators are looking to draft urgent legislation to update Ireland’s regulations ahead of MiCA implementation, while Spain has planned early implementation.

MiCA is set to come into effect on Dec. 30, 2024.