Dutch Official: Bitcoin Transactions Probably Not Liable for VAT

While not yet official, there are hints that bitcoin transactions might not be liable for VAT in the Netherlands.

AccessTimeIconNov 25, 2014 at 5:04 p.m. UTC
Updated Sep 11, 2021 at 11:21 a.m. UTC
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Bitcoin transactions will "probably" be not liable for value added tax (VAT), according to Jakob Kamminga, an official from the Dutch Ministry of Finance.

His comments were made during a debate on bitcoin and tax at VU University, Amsterdam, on Thursday.

This would mean that purchases with bitcoin will only be taxed on the goods and services side of the transaction, as is the case with fiat currency – not on both sides of the transaction, as is the case with barter transactions.

When asked about the statement, Kamminga's spokesperson at the Ministry of Financebito, Adriaan Ros, told CoinDesk:

"During the presentation on Thursday, it was indeed indicated that the ministry is considering exempting bitcoin transactions from VAT."

He indicated that this is based on the notion that such exemptions apply to payments instruments, which, if the term is interpreted broadly, may include payments in bitcoin.

Ros continued: "It should be noted that these are preliminary and conceptual thoughts, however, that are yet to take shape and will need to be submitted through the usual routes, in which we will seek commentary from businesses and tax advisors. This happens by default in all policies in the field of taxation that are to be published.”

Reactions from the community

Although Kamminga's remarks did not represent official statements by the ministry, they are considered a step in right direction by many in the Dutch bitcoin community.

“This certainly seems like good news,” said Roger van de Berg, a tax lawyer at Baker & McKenzie and one of the speakers at the debate.

He explained:

“If bitcoin transactions would not be out of the scope for VAT purposes, as is the case in many countries outside [and within] the European Union ... VAT should be charged on any bitcoin that is purchased from a broker. Additionally, anyone who regularly pays with bitcoin could in this respect become a VAT entrepreneur, and would have to submit VAT-[liable] barter invoices to local merchants who accept payments in bitcoin.”

While it's still somewhat unclear whether the VAT exemption would only apply to private individuals or commercial activities undertaken by brokerages, exchanges and professional day-traders as well, it seems that the Ministry of Finance is also considering a VAT exemption for businesses.

Jouke Hofman, CEO of Dutch bitcoin brokerage Bitonic, was present at the Amsterdam debate. He indicated that he was pleasantly surprised by Kamminga's remarks, adding that the direction the tax authority seems to be heading in is great news for the Netherlands:

"The Dutch government used to refer to outdated or even irrelevant statements which resulted in a lack of clarity. If the tax authority decides to go through with this proposal, it would not only stimulate the business climate in the Netherlands, but it would also create a clearer road for bitcoin payments for the Dutch.”

Benefits for the Netherlands

If Kamminga's remarks will indeed translate into actual policy, it would give bitcoin a VAT status in the Netherlands similar to the UK and Finland, and would certainly present a boon for the Dutch bitcoin community.

Consumer-focused projects in Amsterdam and Arnhem have launched to establish the country as a hub for bitcoin activity. The Hague's Bitcoin Boulevard project led the way back in March, with 10 merchants along two canal-side streets all accepting the digital currency.

The Netherlands is also shaping up to become a hotbed for bitcoin innovation due to the establishment of BitPay's European headquarters in Amsterdam, as well as the presence in the country of analytics platform BlockTrail, the aforementioned brokerage Bitonic, and the recently-opened exchange CleverCoin, among others.

Purchase receipts image via Shutterstock


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