The Netherlands is considering changes to the 36% tax on unrealized profits

Are the taxes still too high ?

The Dutch government, under the leadership of Finance Minister Eelco Heinen, has indicated it will seek to amend Section 3 of the recently passed Real Profits Act (Wet werkelijk rendement box 3) , which stipulates a 36% tax on real investment profits – including unrealized capital gains on stocks, bonds, cryptocurrencies, and other liquid assets – effective from January 1, 2028.

This move comes just weeks after the House of Representatives (Tweede Kamer) passed the bill on February 12-13, 2026, and following intense lobbying efforts from investors, entrepreneurs, and tax advisors who argued that market-based valuation methods create liquidity problems, tax " paper profits ," and pose a risk of capital outflow.

In interviews and statements reported on February 25 (e.g., NOS, RTL Nieuws), Minister Heinen confirmed that the cabinet believes the current draft needs to be revised, particularly to address concerns about taxing unrealized profits without corresponding cash flows or a mechanism for offsetting losses.

A spokesperson for the minister said: " The bill needs to be amended. The minister and deputy minister will discuss this with the Senate and Parliament. " Discussions are underway ahead of consideration by the Senate (Eerste Kamer), where the proposal faces uncertain support.

Taxing something out of nowhere ?

This reform stems from rulings by the Dutch Supreme Court (particularly during the 2021–2024 period) declaring the previous Section 3 system—taxing assumed/expected returns on assets—unconstitutional because it taxed low-yield savers too highly while undertaxing high-yield savers. Faced with a revenue shortfall of billions of euros, lawmakers opted for the " real returns " model:

Capital gains tax (Vermogensaanwasbelasting): An annual tax on the increase in asset value (assessed at market price) plus actual income (dividends, interest).

• Tax rate: Fixed at 36% (including social contributions in some tax brackets).

• Scope: Applies to stocks, bonds, cryptocurrencies, and most liquid investments (exemptions apply to principal real estate, some startups/business assets, and a shift to taxing realized profits).

• Threshold: Small annual tax-free profit (~1,800 euros).

• Reason: To meet the court's requirement of "actual profit" while maintaining revenue neutrality.

This system is clearly positioned as a transitional system by the outgoing and newly inaugurated ruling coalitions (D66/VVD/CDA). Coalition agreements and parliamentary motions (including from the BBB and other parties) call for consideration of a purely vermogeneous tax system (applying only realized capital gains tax) before Budget Day 2028, potentially delaying or replacing the unrealized component.

Impact on cryptocurrencies and growth assets

For cryptocurrency holders and investors in highly volatile assets, unrealized profits can be highly volatile. A 36% tax rate on paper profits could:

• Increased selling pressure in the short term.

• Reduces the incentive to hold long-term.

• Pushing capital flows to jurisdictions with more favorable tax policies.

• Reducing the attractiveness of high-growth investments.

In particular, digital assets often experience significant fluctuations in value, making the annual assessment of unrealized profits for tax purposes complex.

Our review

The Dutch Cabinet's reconsideration of a proposed 36% tax on unrealized profits highlights the tension between financial reform and investment competitiveness. While aiming to create a fairer property tax structure, the policy risks causing liquidity stress and capital outflows if implemented aggressively.

For both equity and cryptocurrency investors, the outcome of this debate could significantly impact long-term capital allocation decisions in the Netherlands.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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