The Netherlands plans to tax unrealized capital gains on a range of investments, including stocks, bonds and cryptocurrencies, sparking warnings of capital flight.
A majority of lawmakers in the Dutch parliament appear ready to back changes to the country’s Box 3 asset tax regime, which would require investors to pay annual tax on both realized and unrealized gains, even if assets have not been sold, NL Times reported on Tuesday.
The plan follows court rulings that struck down the existing system for relying on assumed, rather than actual, returns. The Tweede Kamer (House of Representatives) debated the proposal again this week, with more than 130 questions put to caretaker State Secretary for Taxation Eugène Heijnen.
While many lawmakers acknowledged flaws in the plan, most signaled they would support it, citing an estimated 2.3 billion euros ($2.7 billion) per year in lost revenue if implementation is delayed further.
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Dutch parties back tax on unrealized gains
Under the proposal, investors in equities, bonds and cryptocurrencies would face annual taxation on paper gains. Heijnen reportedly told parliament that taxing only realized returns would be preferable but is not considered workable by the government before 2028. With public finances under pressure, further delays were ruled out.
Several parties, including People’s Party for Freedom and Democracy (VVD), Christian Democratic Appeal (CDA), JA21 (Right Answer 2021) and Farmer–Citizen Movement (BBB) Party for Freedom (PVV), are expected to back the bill.
Left-leaning parties such as Democrats 66 (D66), GreenLeft–Labour Party (GroenLinks–PvdA) also support the changes, arguing that taxing unrealized gains is simpler to administer and avoids major budget shortfalls, per the report.
Notably, the revised Box 3 system would be more favorable for real estate investors, allowing deductions for costs and taxation only upon realizing profits, though second homes would face an additional levy for personal use.
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Dutch unrealized gains tax sparks crypto backlash
The tax plan has triggered sharp criticism from investors and crypto figures, who warn the move could accelerate capital flight.
Prominent Dutch crypto analyst Michaël van de Poppe called the plan “insane,” arguing it would sharply raise annual tax burdens and push residents to leave the country. “No wonder people are leaving the country, and to be fair, it’s completely right to do so,” he wrote.
Source: Michaël van de Poppe
“Taxes on unrealized gains and wealth may be this century’s Boston Tea Party, Reign of Terror, or Bolshevik moment,” another user wrote.
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