Did you hold any cryptocurrency as a private individual on 1 January 2020 or 1 January 2021? You may be liable for tax on this. What is the value on which you are actually liable for tax, and will you receive an annual statement regarding this? This article answers these questions.
What does the term ‘cryptocurrency’ cover?
Cryptocurrency is value in the form of an amount in a cryptocurrency. This is a digital currency. The best-known cryptocurrency is Bitcoin.
As well as Bitcoin, there are now many other digital coins, such as Ethereum and XRP. Cryptocurrency is recorded on a blockchain. Depending on which cryptocurrencies you hold, these are sometimes shown in a single overview and, in other cases, in separate overviews.
Box 3 (income from savings and investments)
Cryptocurrencies are classified as assets in Box 3. The value as at 1 January of each year must be declared in the income tax return. The exchange rate on the reference date provided by the exchange platform used must be applied.
You will therefore not receive an annual statement from the platform where you hold your cryptocurrency; instead, you must calculate the value yourself based on the cryptocurrency you hold. It is therefore very important that you inform your accountant or tax adviser of your cryptocurrency holdings.
Do you owe tax?
Whether you owe tax on the value of your cryptocurrency depends on the value of all your assets in Box 3. If, on 1 January 2020, the value of your savings, shares, second home(s) and/or cryptocurrency and similar assets, less your debts in Box 3, is less than €30,846 (without a tax partner), then you do not owe any tax on this amount in Box 3. For tax partners, the threshold is €61,692.
With effect from 1 January 2021, the tax-free allowance has been increased to €50,000 (without a tax partner) and to €100,000 (with a tax partner).
If you have any questions regarding this article, please do let us know.