The Netherlands Approved a Tax That Could Force Investors to Sell

A newly approved Dutch framework applies a 36% tax on annual portfolio gains regardless of whether holdings were sold. If prices later fall, the tax still stands. Indeed, investors in the Netherlands may soon face taxes on profits they never realized, and in volatile markets like crypto, that could mean selling assets just to pay the bill.

For long-term holders, the shift changes the economics of investing. Taxation becomes tied to temporary valuations instead of realized outcomes.

Therefore, in markets defined by high volatility cycles, that introduces a new structural pressure in the form of forced liquidity during downturns.

How Unrealized Gains Tax Would Actually Work

The proposal passed by the Dutch House of Representatives establishes annual taxation on unrealized capital gains beginning in 2028.

Each year, portfolio values are measured on January 1 and compared to the prior year. Then, the increase is treated as taxable income at a 36% rate after a modest exemption of roughly €3,600 for couples.

The key controversy lies in valuation timing. Taxes are owed based on the snapshot, not on realized profit.

Therefore, if an investor’s portfolio rises from €50,000 to €100,000 at the valuation date, the €50,000 gain becomes taxable even if markets decline before payment is due.

This mechanism effectively converts paper gains into immediate tax obligations. In volatile assets, investors may be required to sell holdings into falling markets simply to cover taxes calculated during prior highs.

Crypto Markets Are Watching This Policy Closely

Digital assets are particularly sensitive to valuation-based taxation. Indeed, they combine high volatility with long holding periods.

Additionally, many investors accumulate through cycles without selling, realizing gains only years later. Under an unrealized-gain regime, those holders could face recurring tax liabilities during bull markets.

Importantly, if this model is applied across Europe, they could structurally alter market behavior.

Annual valuation taxes would create predictable sell-pressure after rallies. Which could potentially amplify drawdowns as investors liquidate assets to meet obligations.

However, for policymakers the approach stabilizes tax revenue and treats assets uniformly. On the other hand, it shifts the risk profile of holding for crypto investors.

Indeed, from price volatility alone to the additional constraint of tax-driven liquidity demands.

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