Netherlands Plans to Launch Annual Crypto Capital Gains Tax by 2028

The Dutch parliament took a step this week toward adopting a new tax system by 2028. Under the proposal, cryptocurrency investors in the Netherlands would pay annual taxes on both realized and unrealized capital gains.

On Monday, the Tweede Kamer, the lower house of the Dutch parliament, discussed a proposal to change the Box 3 asset tax. This change is intended to address an annual treasury shortfall of about €2.3 billion due to previous court losses.

Parliamentary majority support

Despite hesitance among some politicians, most parliament members, including those from the VVD, PVV, CDA, JA21, BBB, and GroenLinks-PvdA, expressed support for the proposal. They found alternative plans unworkable within the needed timeframe.

The proposed legislation focuses on investors in stocks, bonds, and cryptocurrencies. These investors could face taxation on the growth of their portfolios without having sold any of their assets for cash.

The unrealized gains controversy

This “unrealized gains” tax is the most controversial part of the bill. The caretaker government has acknowledged that taxing gains only when cash is received would be more ideal, but it is not currently feasible by the 2028 deadline.

While left-leaning parties like GroenLinks-PvdA back the idea of taxing profits that haven’t been cashed out to avoid budget deficits, they want even higher taxes on those with substantial capital gains.

Box 3 legal history

This legislative change comes after years of legal disputes regarding the original Box 3 system. Earlier court decisions ruled that the Dutch government wrongly taxed citizens based on “fictitious returns.” This method was based on a fixed rate of profit for assets, as opposed to taxing based on real earnings.

The new proposal aims to improve on this by basing taxation on real gains. However, with the inclusion of unrealized gains for liquid assets like crypto, some MPs, such as Peter Grinwis of the ChristenUnie party, warn of a taxation system as complicated as before, if not more so. 

Parliament faces deadline pressure

London-based accounting firm EY notes this proposal is seen as a necessary step toward the government’s goal of implementing a full capital gains tax. The Dutch Tax Authority, Belastingdienst, expects to need at least 900 more employees to handle the administrative workload of this new system.

Moreover, the parliament is facing heavy pressure to pass the bill by mid-March. Any delay could threaten the 2028 launch and result in a multi-billion euro deficit in the national budget.

EY also highlighted that while crypto and liquid assets face annual taxes on all value changes, real estate and start-up shares will only be taxed upon sale. Under the proposal, property owners may be able to deduct costs while accounting for a deemed rental value for personal use.

Asset class disparities

The proposed reform could create a gap between all assets. Investors in crypto assets and stocks would face tax charges on gains, while investors in real property may take advantage of what is being introduced, allowing them to offset expenses from which tax is levied on the income, as well as when selling the property.

However, owners of second homes will incur an extra tax for their personal use of these properties. The Netherlands is likely to implement one of the most stringent tax policies on digital assets in Europe, prioritizing government stability over investor preferences. 

Although many political parties have been raising doubts by asking over 130 serious questions during the discussion, the necessity to pay the huge cost to bridge the €2.3 billion budget deficit is inevitable for the parliament to do so. Moreover, preparing for a tougher 2028 process is necessary for investors, as the deadline is drawing near.

Also Read: Thailand’s SEC Gears Up for Major Regulatory Updates in 2026

Follow The Crypto Times on Google News to Stay Updated!