The Netherlands House Has Approved a 36% Tax on Unrealized Capital Gains

• The Netherlands’ House of Reps has approved a 36% tax on unrealized capital gains.
• Wet werkelijk rendement Box 3 targets 2028 takeoff in the Dutch country.
• Analysts note that the new tax regime could trigger capital flight from the Netherlands.

According to reports, the Dutch House of Representatives has approved a 36% tax on unrealized capital gains, permitting only forward loss offsets. The latest development has shifted the responsibility of final passage to the Senate, with the public expecting a smooth passage of the bill, considering that the parties that supported the tax bill are dominant in the Senate.

The Netherlands Targets 2028 for Implementing New Tax

Following the tax bill’s passage by the House, critics have warned of potential disruption in long-term investment strategies. They think it will weaken compounding effects and encourage capital outflows. Despite publicly criticizing the bill, most right-leaning parties reportedly voted in favor of it, citing fiscal constraints and the cost of delaying or revising the plan.

A few weeks ago, the Netherlands’ parliament voted to overhaul its annual income tax filings. They initiated the process to install a new system where investors will owe tax each year based on changes in asset value, even without selling anything. The Netherlands targets 2028 for the full implementation of its new tax regime, known as Wet werkelijk rendement Box 3.

For context, the new tax regime will involve measuring the difference between an asset’s value at the beginning and end of the year, plus any income received. It means that the Netherlands authorities will tax both realized and unrealized gains. In the meantime, critics have warned that the new system could create significant liquidity problems, forcing investors to pay taxes on paper without having cashed out.

Users React Over 36% Tax on Unrealized Gains

Several users reacting to the latest development in the Netherlands consider the move an exploitation by the government. While many think such a rule is unnecessary, the more considerate ones believe a 36% tax rate is extremely high. They believe 2%-3% tax on unrealized capital gains is a more sensible proposal.

In the meantime, analysts, particularly those in the cryptocurrency industry, predict that such an “unfavorable” tax regime could trigger capital flight, with investors moving to jurisdictions with more friendly tax policies.