Netherlands to Tax Unrealized Crypto Gains from 2028 Under Box 3 Reform
The Netherlands plans to tax unrealized cryptocurrency gains beginning January 2028 under a proposed law called ’Wet werkelijk rendement box 3’ (Actual Return on Box 3 Act). The reform replaces the current deemed-return model in Box 3 with a capital growth (actual return) system that taxes the change in asset value between January 1 and December 31. Crypto holders — including Bitcoin (BTC) and Ethereum (ETH) investors — would owe tax on paper gains even if assets remain unsold. The draft sets a flat tax rate of 36% on actual returns, with an expected tax-free allowance around €1,800 per person on returns (not on total assets). Staking rewards and lending interest are treated as part of actual return. The Netherlands will also implement the EU DAC8 automatic reporting from 2026, requiring crypto platforms to share user holding data with tax authorities, increasing enforcement and the need for accurate record-keeping and tax tools. The reform allows loss compensation: intra-year offsets and indefinite carry-forwards of net losses. The proposal follows Dutch Supreme Court rulings and remains subject to parliamentary debate; observers (e.g., Deloitte) warn of potential liquidity issues if taxpayers must sell assets to meet tax bills. This change materially raises tax exposure for crypto investors and calls for planning, accurate reporting, and consultation with Dutch tax professionals.
Bearish
Taxing unrealized crypto gains increases immediate tax liabilities for holders without providing liquidity. A 36% tax on paper gains raises the probability that some investors — especially those with concentrated positions in BTC, ETH or illiquid tokens — will need to liquidate holdings to pay taxes, adding sell pressure. DAC8 reporting (from 2026) reduces undeclared holdings and increases enforcement, making tax shocks more likely and faster to materialize. In the short term, the announcement can trigger risk-off selling and higher volatility as traders de-risk positions and reposition for tax exposure. Historically, sudden or higher tax burdens (or proposals perceived as such) increase supply-side pressure: examples include capital gains tax changes or corporate tax events that coincided with sell-offs. In the medium-to-long term, effects depend on policy details and implementation (timing of payments, relief measures, carry-forward rules). Loss carry-forward reduces permanent impact for long-term investors, and clarity around reporting can improve market transparency, which is neutral-to-positive for institutional participation. Overall, immediate net impact is negative for price action and trader sentiment, while long-term effects hinge on administrative details and taxpayer relief measures.