Dutch Government to Introduce Capital Gains Tax From 2028, Ending Tax on Assumed Bitcoin Returns
Key Takeaways
- •The Dutch government plans to introduce a capital gains tax in 2028 that would tax investment profits only when they are realized, replacing taxation of assumed returns.
- •Most financial instruments would fall under the new tax from 2028, with remaining assets transitioning in 2030, but the letter left open whether digital assets start in 2028 or 2030.
- •The Netherlands currently taxes Bitcoin and other digital assets based on an assumed 4% annual yield, so holders can owe tax even in years when their assets lose value.
- •Under the proposed realized-gains model, unsold holdings would no longer generate annual charges, with tax due only when gains are realized, such as through a sale.
- •European crypto tax rules are generally stricter than those in the United States, though Germany and Portugal exempt crypto held beyond a year, and the EU's DAC8 directive now requires exchanges to report user and transaction data to tax authorities.
Dutch Bitcoin holders could soon owe tax on their gains — but only when they sell.
The Dutch government announced on Tuesday that it plans to introduce a capital gains tax starting in 2028. If approved, the new system would tax investment gains when they are realized, replacing the current approach of levying taxes on assumed returns or unrealized increases in value, according to a letter from the Dutch cabinet to the House of Representatives published on Tuesday.
"The earning capacity of the Dutch economy calls for a way of taxing wealth that facilitates investment," the letter read.
Most financial instruments would fall under the new tax from 2028, while remaining assets would transition two years later, the letter added. It did not make clear whether digital assets would be taxed starting in 2028 or from 2030 — a detail left open as the proposal moves toward, and one that will determine when Dutch Bitcoin holders shift to the new regime.
Bitcoin and other digital assets in the Netherlands are currently taxed on an assumed annual yield rather than on actual or realized profits. The Dutch tax authority presently assumes that assets earned a notional 4% return each year, regardless of what the holder actually earned. Because the levy is tied to that assumed figure, holders have faced tax bills even in years when their assets lost value. Under the proposed realized-gains model, unsold holdings would no longer generate such annual charges, with tax due only when gains are realized, such as on a sale.
Crypto tax regulations across Europe are mixed but, on the whole, stricter than in the United States. Since January, the European Union's DAC8 directive has required crypto exchanges to collect detailed data on their users and transactions and report it to national tax authorities, much as banks already do for ordinary accounts.
Not every country within the trading bloc takes a strict approach, however: Germany still exempts crypto held for more than a year, and Portugal does the same after 365 days.
This article first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.
