Netherlands plans to tax unrealized crypto gains from 2028, raising investor concerns, capital flight risks, regulatory pressure, and long-term impacts on market confidence.
The Netherlands is preparing a major change to its investment tax system, including crypto. As a result, there is new pressure on investor confidence. Moreover, critics warn that the proposal could cause capital and talent to fly abroad quickly.
Dutch Parliament Moves Toward Unrealized Gains Tax Reform
Dutch legislators are pushing ahead with changes to Box 3 for asset taxation, NL Times reports. Under the proposal, investors would pay annual tax on realised gains and unrealised gains. Consequently, there may be taxes even when no assets are sold.
The new framework is called Wet werkelijk rendement Box 3. Importantly, it replaces an assumed system of return that was found to be unlawful by the Dutch Supreme Court. Therefore, officials say the reform inculcates fairness by taxing real returns.
Related Reading: Bitcoin News: Netherlands Moves to Tax Unrealized Bitcoin Gains by 2028 | Live Bitcoin News
The proposal includes stocks, bonds, and cryptocurrencies owned by private investors. As a result, crypto holders would be faced with annual tax obligations with no liquidity events. This shift has generated strong opposition across the digital asset sector.
Prominent Dutch crypto analyst Michaël van de Poppe openly criticized the proposal. He called the plan unreasonable and financially damaging. Moreover, he said the higher annual taxes could drive residents away.
In addition, Van de Poppe argued that taxes already increase every year without making the public more efficient. As such, he asked why authorities seek more revenue rather than solving inefficiencies in spending. His comments reflect broader investor frustration.
Despite the criticism, the proposal looks very likely to pass parliament. Importantly, lawmakers put the number at preventing $2.3 billion in lost annual tax revenue. Supporters think that this justification outweighs investor concerns.
Investor Concerns Rise Ahead of 2028 Implementation Timeline
The tax reform is set to take effect on January 1st of 2028. Meanwhile, transitional rules permit the taxpayers to include lower proven actual returns. However, the long term goal is still to tax unrealized gains 100%.
Under the new system, losses are allowed to offset gains in the same tax year. In addition, net losses can be carried forward indefinitely. Supporters claim these features ease pressure on volatile investments.
Nevertheless, investors do raise serious liquidity risks under the proposal. Especially, it may be needed to pay taxes without receiving cash from the sale of assets. Therefore, the forced selling risks can and do increase market volatility.
Crypto investors also increase concerns over international competitiveness. As a result, analysts expect some investors to move to lower tax jurisdictions. Common alternatives are Bulgaria, Hungary, and Malta.
In parallel, the enforcement of regulations is growing across the European Union. From 2026, the Netherlands will be implementing the DAC8 directive. This rule requires crypto exchanges to automatically share their user data.
As a result, oversight on compliance will become more robust on the eve of the tax. Critics say this combination serves to hasten capital flight rather than buy compliance. They believe there is a quick reaction of mobile capital to restrictive tax regimes.
The current system has a concession for reporting reduced returns. However, this option requires a lot of documentation and proof. Therefore, many investors consider it to be impractical on the long term.
Overall, the proposal is a critical moment for Dutch crypto policy. While officials aim to be fair and also to protect revenues, investors’ sentiment is fragile. As a result, capital flight risks could redefine the crypto landscape in the Netherlands.
Source: https://www.livebitcoinnews.com/netherlands-risks-investor-exit-with-proposed-crypto-tax-on-unrealized-gains/
