 ▲ Netherlands, Virtual Assets, Taxes / ChatGPT-Generated Image |
The Netherlands has passed an unprecedented bill imposing a 36% tax on unrealized gains from digital assets even if they are not sold, triggering alarm among investors worldwide and prompting considerations of relocating residence to avoid the tax burden.
Nic Puckrin, host of cryptocurrency-focused YouTube channel Coin Bureau, said in a video uploaded on February 17 that the Dutch House of Representatives approved the Actual Return in Box 3 Act on February 13, imposing a harsh tax burden on digital asset holders starting in 2028. Puckrin explained that the bill passed with an overwhelming 93 votes in favor, and beginning January 1, 2028, Dutch residents will be subject to a flat 36% tax on unrealized gains from liquid assets, including Bitcoin (BTC).
The measure was introduced as a temporary bridge solution to cover an annual €2.3 billion tax revenue shortfall that arose after the Dutch Supreme Court ruled the previous tax system unconstitutional. Puckrin criticized the clear double standard in which real estate and startup equity are taxed only upon sale, while digital assets such as Bitcoin are taxed even while being held. He argued that the government has made highly liquid and innovative assets a scapegoat to address its budget deficit.
Taxing unrealized gains poses a significant risk of creating a liquidity death spiral, forcing investors to sell assets simply to raise cash to pay their tax bills. For example, if an investor bought Bitcoin at $20,000 and its value rose to $100,000, they would owe approximately $28,800 in cash taxes on the $80,000 unrealized gain despite not having sold the asset. If Bitcoin surged to $150,000 at year-end, triggering a substantial tax liability, but then plunged to $60,000 early the following year, the investor could face bankruptcy by owing more in taxes than the total value of their portfolio.
Even those choosing to emigrate to escape the tax burden would face a so-called protective assessment, effectively an exit tax, requiring immediate taxation based on unrealized gains—amounting to de facto capital controls. Puckrin predicted that the Netherlands could see a repeat of scenarios in the United Kingdom, where celebrities fled a former 98% top tax rate, or in Sweden and France, which abandoned wealth taxes due to capital flight. He also warned that since the United States had previously proposed a 25% tax on unrealized gains for individuals with assets exceeding $100 million, the Dutch legislation could signal the beginning of a broader global tightening of taxation.
As tax pressure intensifies, investors are reportedly relocating to jurisdictions such as Dubai in the United Arab Emirates, which levies no personal income or capital gains taxes, or El Salvador, which exempts Bitcoin transactions from taxation. There are also concerns that underground economic activity utilizing privacy coins such as Monero (XMR) could increase to avoid government surveillance. Monero reached an all-time high of $800 in January 2026, reflecting such demand. Global financial authorities and investors are closely watching whether the Netherlands’ experiment will ultimately result in an economic own goal driven by capital flight.
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