The Netherlands has taken a step toward taxing unrealized gains on cryptocurrency holdings, after the Dutch House of Representatives passed the Box 3 Actual Return Tax Act. The measure still needs Senate approval before it can become law.

If the bill is also adopted by the Senate, the new system would start in 2028. Under the proposal, crypto investors could be taxed on yearly increases in the value of their holdings even if they do not sell those assets during the tax year.

Shift in how Box 3 income is taxed

Box 3 is the part of the Dutch income tax system that applies to savings and investment assets, including bank deposits, shares and cryptocurrencies. The bill would change that framework by moving to a system based on actual returns rather than the current approach that has faced criticism.

Under the revised model, taxable return would include items such as interest, dividends and changes in the value of assets. The change is part of a broader effort by Dutch lawmakers to align taxation more closely with what taxpayers actually earn or lose on their investments.

How crypto would be treated

For liquid assets such as cryptocurrencies, the proposal uses a capital gains accrual method. In practice, that means tax would be calculated using the difference in value between the start and the end of the year, even when the investor has not sold the asset.

The same treatment would apply to stocks and cryptocurrencies regardless of where or how those assets are held. The focus is on annual value changes, not on whether a disposal takes place during the year.

Loss relief and exceptions

The proposal does not only capture gains. If asset prices decline during the year, the resulting losses could be carried forward and used to offset gains in later years.

Not every asset would be handled in the same way. Some illiquid holdings, including real estate and startup equity, would be treated differently and taxed on realized gains or losses when they are sold rather than on yearly valuation changes.

What happens next

The bill has cleared the lower house, but it is not yet final. Senate review is still required before the Box 3 Actual Return Tax Act can take effect.

If the Senate also approves the measure, the expected start date is 2028. Until then, the proposal remains a planned revision rather than an enacted tax change.

Source: en.bloomingbit.io