Recently, Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, appeared on a BNR Nieuwsradio broadcast about tax evasion by crypto investors. Few crypto investors report to the tax authorities that they have invested in digital coins, nor how much capital they have in the coins; and that costs the tax authorities dearly.
The tax authorities receive a lot of information from banks about bank accounts, for example, so that they can check tax returns. However, this does not yet happen for crypto investments, making it difficult for the tax authorities to check those returns. It is estimated that not declaring crypto investments costs the tax authorities 80 million euros a year.
According to Kavelaars, not declaring crypto returns is a clear form of tax evasion. ‘There is no debate on whether crypto investments should be declared or not,’ he argues. To make checking returns easier for European tax authorities, a directive will come into force within the European Union from 1 January 2026. This directive requires all service providers within the crypto sector in the European Union to declare how much crypto currency they hold. This will allow tax authorities to check tax assessment notices more easily, and possibly correct them retroactively up to five years back.
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You can listen to the full episode from BNR Nieuwsradio, 4 December 2024, here.
