Cryptocurrency and Dutch taxation 2025

This year, Bitcoin has (already) surpassed the milestone of $100,000, and after some minor corrections, the upward trend appears to continue. In a bull market, opportunities abound; however, to enjoy your accrued income or capital without concern, it is crucial to carefully consider any administrative obligations and, of course, the applicable taxation.

In this annual blog, I address the question: “Taxation of crypto assets — what exactly applies?”

Several current issues are discussed:

1. How are you taxed as an investor or (day) trader?
2. How much tax do you pay on cryptocurrency assets or income?
3. Help! I have not reported my cryptocurrency holdings to the tax authorities — what now?

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1. How are you taxed as an investor or (day) trader?

Income tax applies to individuals. The income tax system is divided into “boxes,” whereby—broadly speaking—“active” income (wages, business profits, income from other activities, or income from own home) is taxed in Box 1, and “passive” income (income from assets) is taxed in Box 3.

Trading in cryptocurrencies can generally be categorized into the following strategies:

a. HODL strategy (“Hold On for Dear Life”): cryptocurrencies are purchased and held for a longer period, hoping for price appreciation (regular buying and selling may also fall under this);
b. Day trading: cryptocurrencies are bought and held for a very short period, such as minutes or hours, often not longer than a day. Positions may be taken with leverage (a financial multiplier);
c. Swing trading: the investor aims to profit from price fluctuations or “swings” over the short to medium term, holding positions for days or a few weeks, shorter than HODL but longer than day trading;
d. Day trading using a trading bot: transactions are executed automatically based on an algorithm developed for that purpose.

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Source of Income

To determine whether taxation falls under Box 1 or Box 3, it is essential to understand the relevant tax assessment framework. The rule of thumb is that taxation occurs under Box 1 if a “source of income” exists. This is the case if all of the following conditions are met:

1. Participation in economic traffic: not exclusively private or merely a hobby;
2. Subjective expectation of profit: there is an intention to derive profit;
3. Objective expectation of profit: the profit can reasonably be expected.

In cryptocurrency trading, the first two conditions are generally met. It is the third condition—the objective expectation of profit—that is often not satisfied. Due to extreme volatility, it is difficult to establish in advance that profit from a transaction can reasonably be expected. Even seasoned traders cannot consistently achieve profits through their trades. Generally, therefore, the crypto market is considered speculative in nature. Where speculation exists, an objective expectation of profit is absent, and thus no source of income exists. In most cases, gains from cryptocurrency trading are taxed under Box 3.

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Speculation vs. Objective Expectation of Profit

The distinction between taxable transactional profits (Box 1) and non-taxable speculative profits (Box 3) depends on whether the results of the trading are attributable to the taxpayer’s efforts. The question is whether the taxpayer’s labor can reasonably influence the achieved results. If not, or if influence is (very) limited, the activity is classified as speculation.

Case law on this matter is still developing. From the sparse rulings available, it appears that trading on a single exchange, betting on price movements, constitutes speculation. The result, i.e., price increase or decrease, cannot be influenced by the person purchasing the cryptocurrency. This is comparable to buying a share on a conventional market. Conversely, trading on multiple exchanges and exploiting imperfections between those markets can create a reasonable expectation of profit, provided results are consistently positive. An example is arbitrage trading.

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Implications for Trading Strategies

HODL, Day Trading, and Swing Trading

The HODL strategy is considered passive investing: cryptocurrencies are bought and held until price appreciation occurs. Day trading is active investing, involving short-term buying or taking long or short positions. In both cases, results depend on price movements, which (in principle) cannot be influenced by the taxpayer’s efforts.

Day Trading Using a Trading Bot

Day trading with a trading bot involves executing many transactions in a short period—sometimes thousands per day. The ability to transact quickly and frequently enables exploiting small price differences across exchanges (arbitrage), where individual profits are minimal (often just a few cents) but accumulate to a substantial “advantage.” Due to rapid buying and selling, risks are low. When results are consistently positive, a foreseeable profit exists.

Note: Using a trading bot for a HODL strategy, day trading, or swing trading on a single exchange without exploiting market imperfections is still considered speculation, as it relies on (non-influenceable) price movements.

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2. How Much Tax Do You Pay on Cryptocurrency?

Taxation under Box 1 is based on the net result over the entire calendar year (January 1 to December 31). For Box 3 taxation, only the value of assets on the reference date (January 1) matters. Income in Box 1 is taxed progressively, whereas Box 3 taxes the return on assets.

• Important: Box 3 system adjusted; from 2028 tax based on actual returns

The Box 3 system has been subject to debate over the past decade. Taxation was based on an assumed (fictitious) return of 4% on the entire savings portfolio. This return proved unachievable in recent years, prompting the Dutch Supreme Court to rule that the system infringed on property rights.

In the so-called “Christmas Arrest,” the Supreme Court held that the Box 3 system from 2017 to 2022 violated the European Convention on Human Rights (ECHR). Transitional legislation applies from 2023 until the new system’s introduction, still based on a notional return reflecting what taxpayers are assumed to earn given their savings or investments. The rationale is that savings accounts currently yield little, whereas investing assets tends to yield higher returns. These percentages are updated annually. From 2028, tax will be levied on actual realized returns.

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Taxation in 2025

The table below shows Box 1’s progressive tax brackets, with rates up to 49.50% on income. Box 3 distinguishes assets between savings and investments, calculating the tax base as the net balance of specified assets minus liabilities. Different elements have separate assumed returns.

Box 1: Income from Work and Home (2025)

Bracket	Income Range	Rate
1st	€0 to €38,441	35.82%
2nd	€38,441 to €76,817	37.48%
3rd	Over €76,817	49.50%

Box 3: Income from Savings and Investments (2025)

Asset Type	Assumed Return Rate	Calculation
Bank Deposits	1.44%	+
Investments/Other	5.88%	+
Debts	2.62%	-/-

These tables demonstrate that taxation under Box 3 remains comparatively “cheaper” than under Box 1. For example:

A net income from cryptocurrency trading of €100,000 is taxed at approximately 40% under Box 1. In contrast, €100,000 in cryptocurrency assets under Box 3 is taxed at about 2.1%. Savings or debts may affect this rate, and the tax-free allowance for 2025 is €57,684. After determining the assumed return, the net base is taxed at 36%.

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3. Help! I Have Not Reported My Cryptocurrency to the Tax Authorities — What Now?

If you have not fully declared your crypto income or assets to the tax authorities, you are not alone. However, it is advisable to rectify this. With the introduction of European regulations (e.g., DAC 8), it is only a matter of time before the tax authorities receive information that you hold cryptocurrency assets.

This procedure is known as “correcting tax returns” or “voluntary disclosure.” Voluntary correction, before the tax authority reasonably suspects non-compliance, can lead to penalty reductions.

Even if the tax authority has already issued a request for information (i.e., they are “on your trail”), it is still advisable to pursue the correction procedure. Transparency and cooperation are viewed as mitigating factors and, in extreme cases, may prevent criminal prosecution.

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For more information on cryptocurrency and taxation, read my publications or listen to the interviews and podcasts I have recorded on this topic (only available in Dutch) You can also contact me directly:

This article is translated from Dutch to English with ChatGTP and may not be 100% accurate. Although we try to reproduce the original Dutch text as accurately as possible, no rights can be derived from the content of machine-translated texts.