Unrealized Gains Tax Set for Revision?

As we reported in February, the Dutch parliament approved legislation introducing a tax on unrealized gains from investments. The new rules would apply to a wide range of assets, including stocks, bonds, savings, and cryptocurrencies. The issue has returned to the spotlight as the government prepares amendments aimed at softening the impact of the controversial reform.

Under the current proposal, private investors would pay a 36% annual tax on increases in the value of their assets, even if those assets have not been sold. The new system is scheduled to take effect in January 2028.

Cryptocurrencies have become one of the most debated aspects of the reform. Due to their extreme price volatility, investors could be required to pay tax on gains that were never actually realized. For example, if a cryptocurrency portfolio is valued at €100,000 on the tax assessment date, the tax bill could reach approximately €36,000. If the value of the same portfolio then drops to €10,000 a week later, the investor would still be required to pay tax based on the earlier valuation. As a result, they could face a significant financial loss despite never selling any of their assets.

Following strong criticism from investors and business organizations, the government led by Prime Minister Rob Jetten has announced plans to revise the proposal. The Ministry of Finance said it is exploring measures to reduce the negative effects of the new rules, with further details expected before the end of June.

The reform is intended to replace the previous system, which taxed estimated returns and was challenged in court. However, the new model has also attracted criticism. Opponents argue that it is overly complex, could create cash-flow problems for investors, and may reduce the Netherlands’ attractiveness as an investment destination.

Among the options currently under consideration is a mechanism allowing investors to offset future losses against previously taxed unrealized gains. The government is also reviewing special provisions for startups and fast-growing companies. Both these businesses and real estate investments are expected to remain outside the unrealized gains tax system and would instead be taxed only when sold.

The bill was approved by the lower house of parliament in February and is currently being reviewed by the Senate. Any amendments would require another vote, and the minority government will likely need support from opposition parties to secure approval.

Some senators believe the Netherlands should abandon the unrealized gains tax altogether and adopt a traditional capital gains tax system, under which investors pay tax only when assets are sold. This approach is used in most developed economies.

While the government has stated that it ultimately wants to move toward such a system, it does not intend to abandon the 2028 reform. According to officials, withdrawing the proposal would create a significant gap in the national budget.

The new Box 3 tax regime will apply to individual Dutch taxpayers. Institutional investors and many foreign investors will not be affected by the changes.