Dutch Government Prepares to Tax Unrealized Crypto Gains in 2028

The Dutch government is moving closer to taxing unrealized gains from cryptocurrency holdings, including Bitcoin, as part of an overhaul of its Box 3 system. The new system, set to begin in 2028, would tax actual investment returns, including changes in the value of crypto assets. This means that investors could face tax on annual price gains, even without selling their assets.

The current system relies on fixed or notional returns, but the proposed Actual Return Box 3 Act would replace this with taxation based on actual income and asset performance. The new system would take into account both income generated by an asset and changes in its value, which would mean that a rise in the value of Bitcoin or another digital asset could generate a tax liability, even if the investor has not sold the tokens.

The Dutch government has proposed expanding capital gains taxation to financial instruments from 2028, which would mean that assets covered by this category would generally be taxed on their gains when those gains are realized instead of being taxed each year on appreciation that remains on paper. However, direct cryptocurrency holdings do not generally fall within the same legal category as conventional financial instruments, so crypto would remain exposed to the capital growth method during the first stage of the new Box 3 system.