In brief
- From January 2028, taxation in the Netherlands will be applied to actual annual returns, including unrealized crypto gains, as opposed to “fictitious returns.”
- Investors will receive a €1,800 ($2,000) exemption on annual returns, and losses can be carried forward but not refunded.
- The reform follows Supreme Court rulings that found the previous system of taxing deemed or fictional returns unlawful.
Crypto investors in the Netherlands could face changes to their tax bills after lawmakers in the House of Representatives approved reforms that will alter how the country’s existing levy on investment assets is calculated.
The idea of paying tax on unrealized profits has sparked anger among crypto circles, with critics arguing it could force holders to liquidate assets to meet tax obligations. Some users on social media described it as “beyond insane” as volatility in token prices could leave investors with tax bills on gains that later evaporate.
The reform, known as the Actual Return on Box 3 Act, was approved by the House of Representatives on Feb 12 with 93 of 150 lawmakers voting in favour. The law is expected to take effect in 2028, though it still needs approval from the Dutch Senate.
The Netherlands divides personal income into three categories, or “boxes.” Box 1 covers income from employment, home ownership and pensions. Box 2 applies to substantial shareholdings of 5% or more in a company. Box 3—the category relevant for crypto—covers savings and investments, including shares, bonds, investment property and cryptoassets.
Deemed and actual returns
Jan Scheele, spokesperson at the Blockchain Netherlands Foundation (BCNL) told Decrypt that the 36% tax rate that is causing the online furore isn’t new. What’s changed is how people’s gains are calculated. “This rate does not [currently] apply to actual realised gains,” Scheele said. “Instead, it applies to a deemed or fictitious return calculated annually by the tax authorities, irrespective of whether gains were realised.” In practice, he explained, this means that Dutch crypto holders have already been taxed on “assumed returns rather than on actual trading profits.”
“The recent Box 3 legislation primarily shifts the system from taxation based on a fictitious return to taxation based on actual returns,” Scheele said. “In principle, this brings the system closer to economic reality and addresses long-standing legal concerns raised by the Dutch Supreme Court regarding the fairness of fictitious return taxation.”
If the bill passes the Senate and comes into law, Scheele said the impact on crypto holders will depend heavily on market performance and individual portfolio structures. “In strong bull markets, taxation on actual returns could lead to higher effective tax burdens than under the previous fictitious system,” he said, adding that in bear markets or low-yield years, taxation “could be lower, since actual negative returns would be taken into account. The volatility of crypto assets therefore plays a central role in how the new regime will be experienced in practice.”
According to the bill, losses can be carried forward indefinitely to offset future gains, although there is a €500 ($550) threshold before losses qualify. There will be no refund for negative returns.
A “success penalty”
Nevertheless, high-earning portfolios will be hit harder under the potential new regulations. Robin Singh, CEO of crypto tax software company Koinly, told Decrypt he sees the Dutch taxation system for crypto as having a “success penalty.”
“An investor might have been right about the technology and right about the timing, but if they cannot cover the tax burden from other liquid savings, they are forced to cannibalize their position,” Singh said. This, he argued, “effectively punishes the best investors and prevents Dutch citizens from building meaningful, long-term wealth through compounding.”
“This isn’t just a theoretical risk; it’s a math problem that doesn’t account for reality,” he added. “If you are forced to sell 30% of your holdings just to pay tax on a gain you haven’t realized, you lose the “fuel” for your future growth.”
But the biggest flaw could be if the price suddenly drops. “If your assets drop significantly in value after the December 31 valuation but before the tax is due in May, you might find yourself in a nightmare scenario where your entire remaining portfolio isn’t enough to cover the tax bill for a ‘gain’ that no longer exists,” Singh explained.
Scheele noted that this isn’t a new issue, however. “The Dutch system relies on a fixed valuation date, typically 1 January of the tax year,” he said. If an asset subsequently drops sharply in value, that decline is not retroactively adjusted for that year’s assessment, though the loss may be reflected in the following tax year. Nevertheless, he said, “short-term price swings between valuation and payment deadlines are effectively borne by the taxpayer,” a structural feature that can be “particularly sensitive in highly volatile asset classes such as crypto.”
While some on social media are encouraging residents to pack their bags and flee in response to the bill, Scheele still said that the Netherlands has long positioned itself as an innovation-friendly jurisdiction within Europe.
“For policy stability and international competitiveness, clarity and predictability in digital asset taxation remain crucial. Regulatory and fiscal frameworks should balance fairness, legal robustness and the need to maintain an attractive environment for technological entrepreneurship,” he said.
Crypto adoption in the Netherlands is among the highest in Europe. Around 22% of Dutch residents have bought crypto at some point and 17% currently hold digital assets, according to a 2025 survey by BCB Group.
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Source: https://decrypt.co/358312/is-the-netherlands-taxing-unrealized-crypto-gains-its-complicated
