The Dutch House of Representatives has passed the Actual Return in Box 3 Act, a landmark reform that will tax residents at a flat 36% rate on actual returns from savings and investments beginning January 1, 2028. Crucially, the law extends to cryptocurrencies, taxing both realized and unrealized gains. This means that increases in the value of assets like bitcoin, ethereum, and other digital tokens will be treated as taxable income even if the investor does not sell.
Key Provisions of the New Law
To illustrate, if a crypto portfolio rises by €10,000 (approximately $11,850) in a year, that paper gain is treated as taxable income. However, real estate and qualifying startup shares are exempt from this annual mark-to-market approach and are taxed only upon sale. This distinction has sparked concern among crypto holders, who argue the system could force them to liquidate assets simply to cover tax bills. Critics believe the changes may push many crypto investors to consider relocating to jurisdictions with more favorable tax regimes. The government acknowledged liquidity risks in its explanatory memorandum but defended the approach as necessary to prevent billions in lost revenue.
Mitigation Measures: Exemptions and Loss Carry-Forward
The new law introduces several measures aimed at softening the blow, including a tax-free annual return of $2,130 to exempt small savers. It also allows unlimited loss carry-forward for net losses above $590, enabling investors to offset downturns against future gains. Still, crypto advocates argue these provisions do little to address the fundamental problem of taxing gains that exist only on paper.
Market Context and Data
According to De Nederlandsche Bank, indirect crypto investments by Dutch companies, institutions and households reached $1.42 billion by October 2025, up from $96 million in 2020. Direct crypto holdings by the financial sector stood at $134 million in the third quarter of 2025. While these figures represent just 0.03% of total Dutch securities holdings, the rapid growth points to the sector's rising importance — and the potential impact of the new tax regime. The Dutch approach of taxing annual portfolio value changes, including crypto, is unusual by continental standards. Officials maintain that the long-term policy goal is to transition toward a realized capital gains model, but for now, taxing unrealized crypto gains is seen as the only viable option to safeguard public finances.
This legislation marks a significant shift in cryptocurrency taxation and is likely to influence global debates on how to treat digital asset gains. Dutch investors now face the urgent task of reviewing their tax planning strategies ahead of the 2028 implementation date.