“A tax on imagination. In the tax world, we are familiar with taxes on wealth, property and income, but now the Netherlands is targeting ‘virtual wealth’. Starting in 2028, if your Bitcoin portfolio or Nvidia shares skyrocket, you’ll have to pay at the end of the year, even if you haven’t sold a single satoshi. This is what is called a tax on unrealized gains, […]”, — write: businessua.com.ua
A tax on imagination. In the tax world, we are familiar with taxes on wealth, property and income, but now the Netherlands is targeting ‘virtual wealth’. Starting in 2028, if your Bitcoin portfolio or Nvidia shares skyrocket, you’ll have to pay at the end of the year, even if you haven’t sold a single satoshi. This is what is called a tax on unrealized gains, or to put it more poetically: taxing the wind before it turns into a cash storm.
Key points of this article:
- The Netherlands has introduced a “virtual wealth” tax targeting unrealized gains from cryptocurrencies from 2028.
- This reform aims to ease pressure on the budget, but creates a “liquidity trap” for investors, forcing them to sell to pay the tax.
The absurdity of “Withholding”, which is punishable by law For every crypto investor ” walking on the go ” is practically a religion. But in the Netherlands, that dedication may soon come at a high price. The proposed reform of “Box 3” (asset tax category) means that taxes will no longer be based on hypothetical returns, but on the actual annual growth of your assets. The rate being negotiated? As much as 36% of the paper profit.
The absurdity is striking: how can you pay taxes in cash from profits that exist only on the screen? If the market crashes on January 2nd after you paid your tax on December 31st, the IRS will effectively take money you never owned.
Budget nuance: Liquidity trap However, let’s clarify this Kafkaesque picture. The outgoing government of Eugene Heinen is not acting out of the blue fiscal sadism and because of budgetary urgency. The previous system was declared illegal by the Supreme Court, and every day of delay is worth it 2.3 billion euros to the state . Taxation of “real income” should be fairer than the old “fictitious income” system.
However, a glaring injustice remains: real estate investors benefit from the delay. They will only pay after an actual resale. Why? Because taxing the annual increase in the value of a house without the owner having the cash to pay for it would create a serious social crisis. Instead, the tax authorities believe that investors in cryptocurrencies or the stock market need to sell only part of their assets to pay off the debt. That’s what it’s called “liquidity trap” : you are forced to abandon your investment strategy to replenish the treasury.
Towards an outflow of investors and increasing complexity Question complexities also on everyone’s lips. As Dutch parliamentarian Peter Greenwis pointed out, the system is supposedly being simplified, while a huge amount of bureaucracy is being introduced.
After accurately valuing each asset as of December 31, managing loss carryforwards (because yes, you can deduct your future losses, but the tax money is already gone) becomes an accounting puzzle worthy of the Labors of Hercules.
If this law passes, the Netherlands may well see their Web3 brains (and wallets) migrate to greener pastures. After all, if you start taxing something you don’t already own, what’s the next step?
Please wait…