The Netherlands plans to impose taxes on cryptocurrencies like Bitcoin, and starting in 2028, unrealized gains will also be taxed.

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On January 27, news emerged that the Netherlands is drafting a far-reaching tax reform plan, which aims to impose both realized and unrealized capital gains taxes on various crypto assets—including Bitcoin—as well as stocks, funds, and other investment products starting from 2028. Multiple sources within the country indicate that a significant number of parliamentarians support the proposal. Once passed, it could have a profound impact on the Dutch investment environment.

According to the disclosed plan, investors will need to pay taxes on unrealized gains as long as their asset’s market value increases, even if they haven’t sold the assets. This means that price fluctuations in cryptocurrencies will directly translate into annual tax burdens. Gains exceeding 1,800 euros will be taxed at a rate of 36%. Legislators believe this approach more accurately reflects true wealth changes compared to the current system, which relies on “expected returns,” and it is more conducive to establishing a precise wealth tax system.

However, within the crypto community, the plan has quickly sparked controversy. Many investors worry that taxing unrealized gains could disrupt long-term holding strategies, as they might be forced to sell assets at unfavorable prices to cover tax liabilities. Given the high volatility of Bitcoin and other digital assets, unrealized profits could evaporate within a year, while the tax bill has already been generated—considered one of the biggest risks.

Some market observers also warn that strict crypto tax policies could accelerate capital outflows. In recent years, countries like Portugal and the UAE have attracted many crypto entrepreneurs and startups with their friendly digital asset tax regimes. If the Netherlands implements a policy taxing unrealized gains, some investors might reconsider their residency and registration locations, potentially weakening local innovation vitality.

Globally, few countries currently tax unrealized gains on crypto assets, making the Netherlands’ proposal a kind of “test ground.” Governments worldwide are exploring ways to tax digital wealth reasonably, but balancing fiscal revenue with industry development remains an unresolved challenge.

Although the policy will not be implemented until 2028 even if approved, the announcement has already caused waves in the market. Over the coming years, how the Netherlands advances this crypto tax framework and its actual impact on Bitcoin investors and the blockchain industry will become key points of observation for European digital asset policy.

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