Cryptocurrencies judged to be part of the box 3 capital yield tax base

Supreme Court confirms: cryptocurrencies are part of box 3 assets

On 25 April 2025, the Netherlands Supreme Court issued a ruling on the tax treatment of cryptocurrencies. Cryptocurrencies qualify as assets within the meaning of Article 5.3 of the Income Tax Act 2001 (‘ITA 2001’) (Wet inkomstenbelasting 2001) and are thus part of the capital yield tax base of box 3. In doing so, the Supreme Court confirmed the earlier judgment of the Amsterdam Court of Appeal.

Background and dispute

The interested party owned bitcoins and altcoins (‘cryptocurrencies’) worth almost EUR 72,000 in 2019. The Tax Inspector included these cryptocurrencies in the capital yield tax base in box 3. According to the interested party, however, these cryptocurrencies are not 'property rights' within the meaning of Section 3, Book 6 of the Netherlands Civil Code, and therefore cannot be considered to be assets for the application of the fixed capital yield tax in box 3. The interested party argued there was no legal obligation on the part of a third party, which she considered to be a necessary condition for the qualification as property rights.

Judgment of the Court of Appeal

The Amsterdam Court of Appeal rejected this argument and ruled that the term 'property right' in the ITA 2001 must be interpreted more broadly than under civil law. This broad interpretation can be traced back to the legislative history of the ITA 2001, which states that rights without consideration under civil law can also qualify as property rights.

The Court pointed out that cryptocurrencies represent an economic value. They can be bought and sold. Transfer can take place by transmission from wallet to wallet. The Court argued that this constitutes a transferable right that can provide material benefits to the user. These characteristics mean that cryptocurrencies belong to the other assets with fair market value mentioned in Article 5.3(2) of the IB 2001 Act and therefore form part of the capital yield tax base of box 3.

The Court emphasised that the tax legislature’s very intention for using this residual category is to prevent assets from not being subject to taxation purely because of their legal form. According to the Court, the ability-to-pay approach to income tax means that non-traditional assets, such as cryptocurrencies, are also part of box 3 and are thus not exempt from this tax.

Supreme Court's review

According to the Supreme Court, this judgment does not indicate an incorrect interpretation of the law. The Supreme Court further opined that the interested party’s argument that cryptocurrencies do not qualify as property rights under civil law does not affect their tax classification as other property rights with fair market value as referred to in Article 5.3(2) of the IB 2001 Act. The Supreme Court dismissed the other complaints against the Court judgment without further substantiation. The interested party’s appeal in cassation was unfounded.

Source:

• HR 25 april 2025, 24/04805, ECLI:NL:HR:2025:683