Netherlands Pushes to Tax Unrealized Crypto Gains, With 2028 Start Expected

The Netherlands is moving to tax unrealized gains on cryptocurrency investments such as Bitcoin.

Odaily reported on October 1 that the Dutch House of Representatives recently passed the Box 3 Actual Return Tax Act. The bill now awaits Senate review. If it wins final approval there, it will take effect in 2028.

Box 3 is the category in the Dutch income tax system that covers income from savings and investment assets, including deposits, stocks and cryptocurrencies. The core of the amendment is a shift to taxing actual returns, including interest, dividends and changes in asset values.

Under the amendment, liquid assets such as cryptocurrencies would be taxed under a capital gains accrual method. That means investors could be taxed on the difference if an asset's price rises between the beginning and end of the year, even if they do not sell it. If prices fall and generate losses, those losses could be carried forward and offset against gains in future years.

For stocks and cryptocurrencies, the tax amount would be determined based on annual changes in value regardless of where or how the assets are held. An exception would apply only to some illiquid assets, including real estate and startup equity, which would be taxed based on realized gains or losses at the time of sale.

The Dutch parliament is pursuing the revision after criticism that the current tax system does not properly reflect taxpayers' actual returns.