The Netherlands is introducing a 36% tax on crypto assets and stocks.

The House of Representatives of the Netherlands has approved a revolutionary and highly controversial bill that fundamentally changes the rules for investors. According to the new law "On Actual Returns in Box 3" (Wet werkelijk rendement box 3), starting January 1, 2028, residents of the country will be required to pay a tax of 36% not only on earned income but also on the increase in the value of assets that they have not even sold.

In this article, we will explore how the tax on unrealized gains will work, who it will affect, and why the crypto community is already sounding the alarm.

What has changed: from hypothetical income to actual income

For a long time, the Netherlands operated under a system of "assumed yield" (Box 3), where tax was levied based on fictional state-determined rates of capital return. However, after a series of Supreme Court rulings declaring such practices illegal, the government was forced to seek alternatives.

The new decision turned out to be severe: instead of taxing only at the moment of sale (as is done in most countries), the authorities decided to tax the annual increase in the market value of assets.

Which assets are affected?

The new rules cover a wide range of investment instruments:

• Cryptocurrencies: Bitcoin, Ethereum, and any other digital assets.
• Stocks and bonds: securities traded on stock markets.
• Bank deposits: interest on savings.

Exceptions: The tax on unrealized gains will not apply to real estate and shares in startups. They will retain the classic Capital Gains Tax model — tax is paid only at the time of realization of the asset and locking in the profit.

Main risks for investors and crypto holders

The main criticism of the law revolves around liquidity issues and the high volatility of the market.

Tax without cash: Imagine that your cryptocurrency portfolio has increased by €10,000 over the year in value, but you do not plan to sell it. According to the law, you must pay €3,600 in tax. If you do not have cash available, you will have to sell some of your assets to pay the government.Volatility: This is critical for the crypto market. An asset might increase by 100% by the end of the reporting year (you will pay tax), but then drop by 80% in January. In the end, you will pay tax on profits that no longer physically exist.Destruction of compound interest: Annual deductions of 36% from capital gains significantly slow down wealth accumulation in the long run.

Market reaction and political consequences

The project has provoked a wave of outrage. Notable analysts and members of the crypto community are already warning of potential "capital flight" from the Netherlands. Due to massive criticism and concerns about the country's economic attractiveness, some officials have already begun discussing the possibility of revising the implementation mechanisms of the law before it takes effect in 2028.

Parliament has already approved an amendment to shorten the review period from five to three years to be able to respond quickly to negative economic consequences.

Summary for investors

The Netherlands is setting a precedent that other EU countries will closely monitor. If the law is enacted in its current form:

Investors will have to rethink their liquidity management strategies.Dutch tax residency will become less attractive for large crypto holders and active traders.The market anticipates a period of legal turbulence until 2028.

Stay tuned for updates: considering the public outcry, adjustments to rates or the introduction of additional benefits for long-term investors are possible.