How Is Cryptocurrency Taxed for Americans Living in the Netherlands?

For Americans living in the Netherlands, cryptocurrency can have implications not only for Dutch tax reporting, but also for a U.S. tax return. This is because the Netherlands and the United States treat cryptocurrency differently within their tax systems.

Crypto assets are increasingly on the radar of tax authorities worldwide. In the Netherlands, private investors generally report crypto as part of their assets in Box 3. At the same time, new European regulations are increasing transparency around crypto transactions.

For Americans living abroad, however, an additional question arises: how does crypto taxation work in both the United States and the Netherlands?

Because the two systems treat cryptocurrency differently, crypto holdings that appear simple under Dutch tax rules may still have implications for a U.S. tax return.

For this reason, Americans in the Netherlands should consider their crypto holdings not only from a Dutch tax perspective, but also under U.S. tax rules.

The Netherlands: crypto generally reported in Box 3

In the Netherlands, cryptocurrency is typically treated as part of an individual’s assets for tax purposes.

Private investors usually report the value of their crypto holdings on January 1 of the tax year as part of their Box 3 wealth.

The value is normally based on the market price on the exchange or platform where the crypto is held.

This means the Dutch tax system generally focuses on the value of assets at a specific moment, rather than every individual crypto transaction during the year.

At the same time, new European regulations are increasing transparency around crypto ownership.

Under the DAC8 directive, crypto service providers in the EU will be required to collect and report information about users and transactions. These reporting obligations begin in the coming years and will allow tax authorities to exchange more information about crypto holdings.

Importantly, these rules do not introduce new taxes on crypto itself. Their purpose is mainly to improve transparency and reporting.

The United States: cryptocurrency is treated as property

The U.S. tax treatment of cryptocurrency works differently.

The IRS treats cryptocurrency as property, similar to shares or other investment assets.

Because of this classification, the U.S. tax system does not focus only on what you hold, but also on what you do with your crypto.

Certain actions may have tax implications, for example:

• selling cryptocurrency
• exchanging one crypto asset for another
• using crypto to pay for goods or services
• income from mining or staking
• receiving crypto rewards or other digital asset income

In addition, U.S. citizens and Green Card holders generally remain subject to U.S. tax obligations on their worldwide income, even when they live permanently outside the United States.

This means crypto activities may still need to be reported in a U.S. tax return.

Why this difference matters

For Americans living in the Netherlands, the same crypto holdings can be viewed differently by two tax systems.

In the Netherlands, the focus is often on the value of crypto on January 1.

In the United States, the focus is often on transactions and income throughout the year.

This means that following Dutch rules alone may not be sufficient. When crypto forms part of your financial situation, it may also be necessary to review:

• whether crypto transactions could be taxable in the U.S.
• whether crypto income was received (for example staking rewards)
• which transactions may need to be reported in a U.S. tax return

Crypto and the “digital asset question” on the U.S. tax return

The U.S. tax return now includes a specific question regarding digital assets.

Taxpayers must indicate whether they received, sold, exchanged, or otherwise disposed of digital assets during the tax year.

This reflects the way the IRS treats cryptocurrency as property.

Examples of activities that may be relevant include:

• selling crypto
• exchanging one cryptocurrency for another
• paying for goods or services using crypto
• earning crypto from mining or staking

Even when no tax is ultimately owed, certain transactions may still need to be reported.

For Americans living abroad, crypto activity can therefore become part of a U.S. tax return, even when the same crypto assets are treated differently in the country of residence.

For this reason, it is important to keep accurate records of crypto transactions.

Record keeping: often more detailed for the U.S.

While the Dutch tax return may rely primarily on the value of crypto at a certain date, U.S. reporting often requires more detailed information.

For a U.S. tax return it may be necessary to track:

• the purchase date of crypto
• the purchase price (cost basis)
• the date of sale or exchange
• the value of the asset at the time of the transaction
• transaction fees
• staking or reward income received

Without these records, it may be more difficult to meet U.S. reporting obligations.

Depending on the situation, additional international reporting rules such as FBAR or FATCA reporting may also be relevant.

Increasing transparency around crypto

Both the United States and Europe are expanding regulations related to cryptocurrency.

As a result, tax authorities are gaining greater visibility into crypto holdings and transactions.

For Americans living in the Netherlands, this means it is becoming increasingly important to consider crypto not only from a Dutch perspective, but also under U.S. tax rules.

What does this mean for Americans living in the Netherlands?

If you hold cryptocurrency while living in the Netherlands, it may affect both your Dutch tax position and your U.S. tax return.

While the Netherlands generally treats crypto as part of wealth in Box 3, the United States treats crypto as property and often focuses more on transactions and income during the year.

For this reason, it can be helpful to review what information may be needed to comply with both tax systems.

Want to know more about crypto taxation and your U.S. tax return?

We, the founders of Americans Overseas, were born in the Netherlands and received our American citizenship through our (American) mother.

When we first learned about the U.S.–Netherlands tax treaty around 2013, we felt disbelief (“this can’t be true”), anger (“how can they do this?”), fear (“will I get fined or have problems?”), and panic (“what should I do?”).

Unfortunately, it is true that there is a U.S. tax obligation for Dutch citizens who acquired American nationality by birth. There was no information from local authorities, the U.S. consulate referred us to the IRS, and the IRS itself was impenetrable.

That is why we started this initiative: to help others with reliable information, to prevent unnecessary panic, and to offer free, no‑obligation assistance. When needed, we can connect you with a network of affordable professionals (accountants) who can help you meet your U.S. tax obligations.

Contact us for more information

Sources US crypto tax Netherlands

• Nederlandse Belastingdienst — Cryptovaluta
• Rijksoverheid — Transactions Cryptovalute
• Rijksoverheid — DAC8
• IRS — Digital Assets
• IRS — Digital asset reporting reminders
• IRS Publication 54 — Tax Guide for U.S. Citizens and Resident Aliens Abroad