Dutch Wealth Tax Targets Unrealised Crypto Returns

According to reports from the NL Times and De Telegraaf, a parliamentary majority is now prepared to support new legislation known as the "Actual Return on Investment in Box 3 Act,"  ending years of political haggling and legal limbo, with implementation scheduled for 2028.

Previously, taxpayers were required to enter in Box 3 of their tax return assets including shares, bonds, property and crypto, on which they were then charged a levy based on a "fictitious" return set by the authorities. Supreme Court rulings in 2021 and 2024 said the system violated propery rights. 

The taxation of investors based on an assumed rate of return rather than actual profits resulted in cases where assets were taxed on gains that were never made. The new proposal seeks to fix this by taxing actual annual growth. However, for crypto assets, this means a 36% tax rate on the increase in value from 1 Jan to 31 Dec, regardless of whether the assets were sold for US dollars.

The Dutch treasury is currently losing an estimated €2.3bn ($2.5bn) every year due to the delay in implementing a legally sound system. While the government initially preferred taxing only realized gains, caretaker State Secretary Eugène Heijnen stated that a realization-based system is not administratively feasible by 2028. This leaves investors in a liquidity trap, potentially forced to sell portions of their onchain holdings simply to cover the tax liability on paper gains.

The Dutch proposal is part of a broader European pivot toward more aggressive crypto taxation. Just a few weeks ago, Sandmark reported on the Belgian haven closing as Brussels introduced a 10% tax on realized capital gains effective 1 Jan. While Belgium opted for a realization-based model with a €10,000 ($10,900) exemption, the Dutch approach  is significantly more aggressive, offering no such buffer for paper wealth.

Institutional investors should view this as the end of the "regulatory arbitrage" era in Western Europe. As DAC8 reporting requirements go live, the ability to shield onchain wealth from national tax authorities is evaporating. The Netherlands is signaling that it prefers immediate tax revenue over attracting the next wave of digital asset capital. For firms holding significant positions in liquid tokens, the 2028 deadline marks a hard stop for tax-efficient accumulation within Dutch borders.