Nowadays you can deal with cryptocurrency (such as bitcoin) in the income and corporate tax return, but how exactly should you deal with this in your tax return?
Private - Income tax box 3
If you, as a private investor, are in possession of cryptocurrency, you must state this in the income tax return with the assets in box 3. In doing so, you must state the economic value on 1 January (the reference date) of that year in question. It is actually best to look at the value of your cryptocurrency at 00:01 of the new year, immediately after consuming a sip of champagne, and to save it (for example by taking a screenshot).
Private - Income tax box 1
But what if you not only wait and see what the exchange rate does but also do extra work? Then the results shift from box 3 to box 1 and the results are taxed progressively. For example, if you have certain prior knowledge, are you mining (verifying transactions on the blockchain), or if you manage third-party crypto, then you report the results as profit from business or as a result from other activities.
Company - Corporate tax
Another option is to invest in crypto through the BV. The value that you must state in the annual accounts is either the purchase value or the stock market value. It does apply here that the choice has been made (consistent course of action). If the crypto is valued at purchase value, you only pay tax when you sell the crypto again. If it is valued at stock market value, you pay tax on the increase in value every year. As soon as the achieved return goes to private again, this must be done via a dividend payment and an AB tax of 26.90% will be charged.
Private equity or company (BV)?
In income tax, assets are taxed at a notional return, as long as this is indicated in box 3. Price rises during the year are then not taxed. In the BV only the actually achieved return is taxed and you only pay tax on it. When the capital returns to private, you then pay AB-levy again. In addition, there are additional costs associated with the BV because an annual account must therefore be drawn up. Put simply, the rule of thumb is: investing in private equity is more advantageous at high returns and the private limited company structure is more attractive at lower returns.
Do you want to know more about this? Please contact your advisor.
This article was originally published on KRC Van Elderen website at https://www.krcvanelderen.nl/actueel/cryptovaluta-in-je-belastingaangifte
