Netherlands Passes 36% Unrealized Gains Tax
The Netherlands has passed a 36% tax on unrealized gains for assets including crypto, stocks, and bonds, which is set to take effect in 2028. The law will require investors to pay taxes on the appreciation of their holdings annually, even if the assets are not sold. This represents a significant shift in tax policy that could influence investor behavior in the region.
- This tax reform replaces a previous "Box 3" system where taxes were based on a fictional or assumed rate of return. The Dutch Supreme Court ruled this unconstitutional in December 2021 because it sometimes resulted in people paying taxes on returns they hadn't actually made. - While the general rule is to tax unrealized gains annually, there are significant exceptions. Gains on real estate and investments in qualifying startups will only be taxed when they are realized, such as through a sale. - The bill was passed by the lower house of the Dutch parliament (Tweede Kamer) on February 12, 2026, and as of February 24, 2026, it is under review by the Senate (Eerste Kamer). The Senate's finance committee has requested a technical briefing from the Ministry of Finance, scheduled for March 17, 2026, before holding further debates and a final vote. - For tax purposes, the value of cryptocurrency holdings will be assessed based on their market value on January 1st of each year. This value is then used to calculate the annual capital growth subject to the 36% tax. - The new system introduces a tax-free annual return of €1,800. If an investor's total actual return from all Box 3 assets is below this amount, no tax is due. Additionally, net losses exceeding €500 in a given year can be carried forward to offset future gains indefinitely. - This approach of taxing unrealized gains annually is uncommon in Europe. Most other European nations, including Germany, France, and Spain, as well as the United States, tax capital gains on financial assets like crypto only when they are sold or "realized." - The Dutch government has acknowledged that a system based on taxing realized gains would be preferable. However, they opted for the unrealized gains tax model because it was faster to implement and would avoid an estimated €2.3 billion in annual budget losses that were occurring under the transitional system.
