The Dutch Parliament has approved a major reform of the Box 3 tax mechanism, which will tax “actual profits” from savings and investments, including the annual appreciation of liquid assets like Bitcoin, at a flat rate of 36%.
If approved by the Senate, this proposal, scheduled to take effect from January 1, 2028, marks a fundamental shift in how European governments may treat digital assets: moving from a sale-based taxation to a holding-based approach.
Rather than simply calling this a “36% tax on unrealized gains,” a more accurate perspective is that the Netherlands aims to move away from the controversial assumed profit system, transitioning toward a valuation method closer to annual market revaluation for many types of financial assets.
This change not only clarifies what is taxed but also alters the timing of when Bitcoin investors feel the tax pressure, as significant price volatility will directly translate into cash flow issues.
How the Box 3 Mechanism Currently Operates
Box 3 is a tax category in the Netherlands applied to profits from assets such as savings, investment portfolios, second homes, and other assets.
Currently, most Box 3 tax obligations are calculated based on an assumed profit rate combined with a fixed tax rate. This means that even if assets stagnate or decline in value, holders may still owe taxes.
The Dutch tax authority’s 2026 guidelines specify a Box 3 tax rate of 36% and an assumed return of 6.00% for the “investments and other assets” group—including stocks, bonds, and in practice, many non-cash assets.
For example, holding €100,000 worth of Bitcoin in this group, with an assumed return of 6.00%, results in a taxable income of €6,000. At a 36% rate, the tax owed would be €2,160, roughly 2.16% of the position’s value annually, before considering exemptions and offsets.
The 2028 Proposal: Moving to Actual Profit Taxation
The 2028 proposal completely reverses this logic. Instead of assuming how much an investor earns, the tax authority will base calculations on actual profits.
However, for most liquid financial assets, the model is designed to tax annual capital growth—including income and value changes—rather than waiting until sale.
For Bitcoin, this means investors could be taxed on unrealized gains even if they have never sold a satoshi.
The plan also includes mechanisms to mitigate sudden tax burdens, such as an exemption threshold of about €1,800 per year and the ability to carry forward losses indefinitely, although only losses exceeding €500 are deductible. Nonetheless, the core behavioral change remains: large holders will need liquidity to pay taxes during years of strong price increases.
Specific Impact on Bitcoin Holders
With the revaluation approach, Bitcoin’s characteristic rapid price increases become a source of tax friction.
If the price rises 60% in a year, a position worth €100,000 would generate €60,000 in taxable gains. At 36%, that’s €21,600 owed. While this isn’t 36% of the total asset, investors may be forced to sell a significant portion or take out loans to cover the tax bill.
The impact is especially pronounced for Dutch investors heavily involved in crypto markets. The Dutch Central Bank reports that by October 2025, households hold €182 million in crypto ETFs and €213 million in crypto ETNs. Pension funds also hold hundreds of millions in crypto-related treasury bonds, pushing total indirect exposure over €1 billion.
If the tax mechanism shifts to annual valuation and reporting, broker-managed ETP products could be easier to handle than self-custody.
This trend aligns with the global growth of digital asset ETPs, which managed approximately $155.8 billion in assets by early 2026.
Concerns Over a Chain of Sell-offs
Some experts warn that the unrealized gains tax mechanism could create liquidity pressures across markets.
Cybersecurity expert Rickey Gevers suggests that if many investors sell simultaneously to cover taxes, it could trigger a sharp market sell-off, driving prices down and creating a panic cycle—while tax obligations remain unchanged.
Balaji Srinivasan, former CTO of Coinbase, also warns of contagion risks. He argues that forced liquidation pressures in one jurisdiction could influence overall market pricing. He suggests investors might even avoid holding assets in high-tax regions to prevent forced sales.
Exit Tax and Broader European Trends
As annual price fluctuation taxes increase, the role of exit taxes becomes more significant. If taxpayers can reduce their obligations by leaving before the tax year, governments tend to tighten exit tax regulations.
In the Netherlands, discussions about exit taxes have emerged at the government level, including proposals for EU-wide coordination. The tax authorities have also implemented “deferred assessment” mechanisms in some migration cases.
This isn’t unique to the Netherlands. Germany has expanded exit tax rules for investment funds since 2025, and France currently applies exit taxes on certain unrealized gains when leaving the country.
Alex Recouso, founder of CitizenX, notes that the typical chain involves unrealized gains tax → exit tax → global taxation based on citizenship. He cites France’s 2026 budget proposal to tax based on nationality if moving to a lower-tax jurisdiction.
He also mentions the UK, which has seen a wave of wealthy individuals leaving after increasing capital gains taxes, leading to a decline in tax revenue from this source.
Surveillance Infrastructure and Property Rights Debates
European enforcement capacity is also increasing with the DAC8 framework, expanding automatic information exchange on digital asset transactions from 2026, making annual crypto taxation more feasible.
However, critics see this as a major risk to property rights. Recouso argues that the trend toward tighter taxes and restricted exit options reflects growing fiscal pressure. He recommends self-custody of Bitcoin and considering second passports in crypto-friendly regions like El Salvador.
This view aligns with Ray Dalio’s assertion that geographic location is as important as asset allocation.
If the 2028 plan is fully implemented, the Netherlands will become one of the clearest examples in Europe of shifting from a “sale-based” to a “holding-based” Bitcoin tax approach.
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