scoop: The Netherlands has just moved to taxing Bitcoin in the same way as marked-to-market stocks. Members of the Dutch House of Commons supported a review of Box 3, which would tax “actual income” including: Annual price fluctuations of liquid assets such as BTC, in the apartment 36%Even if it doesn’t sell. The goal of the plan is January 1, 2028 (Pending Senate approval) This turns Bitcoin volatility into an annual cash flow issue.
The Dutch House of Commons has approved a major overhaul of the Netherlands’ Box 3 system, which taxes “actual returns” on savings and investments, including annual changes in the value of liquid assets such as Bitcoin, at a flat rate of 36%.
The proposal, which is pending Senate approval and has a start date of January 1, 2028, signals a fundamental shift in the way European governments treat digital assets, moving from taxing the act of sale to taxing the act of holding.
While it is easy to summarize this legislation as a “36% unrealized gains tax”, the clearer picture is that the Netherlands aims to move away from a court-challenged deemed return system to one that treats many financial assets as if they were marked to market annually.
This change is not just about changing tax targets. The situation will change once Bitcoin holders feel taxed, as BTC’s notorious volatility effectively becomes a cash flow problem for local investors.
How Box 3 currently works and why there are already carry costs
Box 3 is the Dutch bucket for taxing returns on assets, covering savings, investments, second homes, etc.
Currently, much of Box 3 is calculated using assumed earnings and a flat tax rate. This system allows you to still end up with a bill even in a flat or down year.
The Dutch tax authorities’ 2026 guidance indicates a Box 3 tax rate of 36% and an assumed rate of return of 6.00% for “investments and other assets” (a category that includes items such as stocks and bonds (actually many non-cash holdings)).
That alone can create meaningful carry costs. Clarify the burden with a simple diagram. If €100,000 of Bitcoin is in the “Investments and other assets” bucket of margin, the assumed return of 6.00% means a taxable gain of €6,000.
At 36%, the bill would be €2,160, or approximately 2.16% of the annual position before thresholds and offsets.
The 2028 proposal completely reverses this logic. Instead of “assuming you earned X,” tax returns are intended to reflect the amount investors actually earned.
However, the architecture of most liquid financial assets is a “capital growth” tax (capturing annual changes in income and value) rather than waiting until sale.
In the case of Bitcoin, this effectively means paying taxes on unrealized gains even if you never sold Satoshi.
The plan includes mitigations designed to blunt sharp edges. The reform report highlights a tax-free annual filing threshold of €1,800 and unlimited loss carryforwards, but only for losses exceeding €500.
While these features are helpful, they do not eliminate core behavioral changes. Even in strong Bitcoin times, large holders still need liquidity.
Why Bitcoin holders feel differently
Under an approach like mark-to-market, Bitcoin’s most famous feature – its large, discontinuous upside – is exactly what creates friction.
If Bitcoin rose 60% in one year, the taxable “return” on a starting position of 100,000 euros would be 60,000 euros. At 36%, the tax is 21,600 euros.
While this is not “36% of your assets,” you may end up selling (or borrowing against) a significant amount of your holdings to pay the bill.
The impact of this policy is increased by the fact that Dutch investors are already deeply embedded in the crypto market, which means this is not a niche tax on a few enthusiasts.
In the Netherlands, exposure to cryptocurrencies can be measured through regulated products. The Dutch Central Bank reported that households held 182 million euros in crypto ETFs and 213 million euros in crypto ETNs as of the end of October 2025.
In addition, the pension fund holds €287 million in “cryptocurrency government bonds” and its total holdings in indirect crypto securities exceed €1 billion.
This substantial footprint suggests that a move to annual taxation may force a shift in how these assets are held.
Broker-held ETP exposures may be easier to manage than self-custodial ones if compliance becomes annual and assessment-based.
This is in line with global trends noted in Fineqia’s January 2026 report, which found $155.8 billion in global digital asset ETP assets under management at the end of the month.
These measures have shown that cryptocurrencies can remain “sticky” even as the broader market capitalization declines, but the new tax regime could test that resilience.
Dutch move risks spreading Bitcoin contagion
The possibility of infection has drawn harsh criticism from industry figures.
Cybersecurity expert Ricky Gevers warned that such arrangements pose a real risk to market stability.
According to him:
“Taxes on unrealized gains can cause a run if investors panic. If everyone starts selling on a certain day to free up cash to pay the tax, prices will crash like crazy. That crash itself will cause further panic and more investors will sell. Everyone sees the value of their portfolio go down, but at the same time they know the amount of taxes they have to pay won’t go down.”
At the same time, Balaji Srinivasan, former CTO of Coinbase, argued that the impact of these taxes will not be limited to the local market. He presented the idea as a contagion risk where forced liquidation pressure spills over into price formation.
He wrote:
“It’s not just that I don’t want to hold my assets as a Dutch person; I also don’t want my assets held by a Dutch person.”
Mr. Srinivasan outlined a hypothetical liquidity spiral to illustrate the risks.
He described a scenario where the asset had a market capitalization of $10,000 and 10 shares were held by 10 different Dutch holders, each with an investment amount close to zero. If the stock reaches $1,000 on tax day, each holder faces a 36% tax liability of $360.
The cryptocurrency entrepreneur explained:
“The first person sells one share, gets $1,000, and pays $360 in taxes while keeping $640. But when the first person sells, the market price drops to $960 per share. So when the second person sells, he only has $600 left after paying $360 in taxes.”
By the time the seventh holder sells, the price could plummet to $200 per share. This is a reasonable scenario if 60% of the cap table is released.
At that price, the seventh holder would have to sell his entire position for $200, but would still have to pay $160 in taxes.
He added:
“The eighth, ninth and 10th are in an even worse situation. By the time they sell, the price will likely have plummeted to less than $100 per share. Like the seventh, a 100% liquidation will not cover their tax liability.”
Mr. Srinivasan expressed sympathy for what he called “once the Flying Dutchman, now the Crying Dutchman” and suggested that this dynamic could force investors to block residents of wealth tax jurisdictions from the cap table to avoid liquidation contagion.
Exit tax and European infectious diseases
An annualized approach to taxing price changes increases the value of another policy tool: exit taxes.
When taxpayers can reduce future debt by relocating before the start of the tax period, governments often respond by tightening exit rules.
In the Netherlands, conversations about exit taxes are no longer abstract. The Dutch government’s letter following the parliamentary debate on taxing the ultra-wealthy explicitly refers to a motion to develop an EU-level exit tax and a national exit tax option.
Separately, the Dutch tax authorities have indicated that in certain immigration situations they may issue a “protection assessment”, indicating that the protection of claims when someone leaves the country is already a well-known concept in the system.
This is part of a European-wide trend. From January 1, 2025, Germany will expand the scope of departure tax to include the holdings of certain investment funds, potentially taxing previously unrealized “hidden savings” when individuals relocate.
France already has an exit tax that applies to the recognition of unrealized gains upon departure.
Alex Recouso, founder of CitizenX, argues that this pattern is predictable, noting:
“It always starts with unrealized gains tax, then exit tax, and finally global taxation.”
Recouzo pointed to France’s proposal to introduce citizenship-based taxation in the 2026 national budget, under which citizens would pay taxes on their global income if they moved to a region with a tax rate 40% lower than in France.
He also highlighted the UK’s challenges, noting that the country will lose more than 15,000 wealthy people in 2025 and net capital gains tax revenue will fall by 10% after increasing capital gains tax.
From taxation to confiscation?
The Dutch move comes as the EU’s enforcement capacity improves.
DAC8 (the EU’s latest update on administrative cooperation) extends the automatic exchange of information to crypto asset transactions, and the regulation will come into force on January 1, 2026.
This infrastructure ensures reliable data flows from service providers, making annualized cryptocurrency taxation possible.
However, critics see these developments as an existential threat to property rights.
Mr. Recouso described the situation as a shift from “taxation to confiscation” and warned that EU countries are effectively bankrupt, raising taxes and blocking exits.
“Eventually they will try to seize your assets,” Lekouso said, likening the situation to a U.S. gold seizure under Executive Order 6102.
He added:
“The right to secede is a fundamental human right. Look at history. All the worst states have taken away the right to secede.”
With this in mind, Recouso advised people to self-custody their bitcoins and obtain a second passport from a friendly country like El Salvador, echoing Ray Dalio’s sentiment that “location is just as important as allocation.”
Therefore, if the Netherlands’ 2028 plan becomes law, it will be one of the clearest examples in Europe of Bitcoin moving from a “sell event tax story” to a “hold event tax story.”
(Tag Translation) Bitcoin
