Can cryptocurrencies be taxed? My eye fell on a case of 25 April this year from the Netherlands Supreme Court (Tax Chambers) A taxpayer (X) believes that cryptocurrencies (in this case bitcoins and altcoins) are not ‘property rights’ (‘vermogensrechten’) and are therefore not to be taxed as income (in the meaning of Box 3 Dutch Income Tax). After the Tax Authorities have imposed the income tax assessment, X files an objection. He believes, among other things, that the cryptocurrencies are not property rights in the meaning of Article 3:6 Netherlands Civil Code. If that is the case, then he does not have to declare them as assets in Box 3. The Tax Authorities, the court and the Court of Appeal disagree with him. They state or rule respectively, that the cryptocurrencies must be declared in Box 3.
The Court of Appeal Amsterdam assesses whether the cryptocurrencies should be included in the return basis in Box 3. The Supreme Court follows this view and points out that the court referred to the parliamentary history of the Income Tax Act 2001, which indicates that the term ‘property rights’ as used in this Act has a broader meaning than the term ‘property right’ in Article 3:6 of the Netherlands Civil Code. The Court further considered ‘… that a position in cryptocurrencies – or at least the user’s ability to obtain consideration in exchange for that position – represents an economic value. Cryptocurrencies can be sold and purchased. Delivery can take place by sending them from one wallet to another wallet (and registering that transaction in the “distributed ledger”). In the Appeal Court’s opinion, a position in cryptocurrencies is therefore transferable. Such a position can also provide the person entitled to it with material benefit, for example by cashing in its value in the form of proceeds from the sale. These characteristics lead the Court of Appeal to conclude that the (position in) cryptocurrencies of the interested party fall under the assets [in the Act], so that they form part of her return basis.’
Cassation fails. The Amsterdam Court of Appeals’s judgment does not demonstrate an incorrect legal view. As they are interwoven with factual assessments, they cannot otherwise be examined for their correctness by the Supreme Court in the cassation procedure. This is a standard consideration that the Supreme Court often uses to settle a case without its own assessment. The tax authorities can now, some 5 years later, settle X’s income tax for the year 2019.
Netherlands Supreme Court 25 April 2025, ECLI:NL:HR:2025:683