The Netherlands plans to tax unrealized capital gains on investments, including stocks, bonds, and cryptocurrencies, potentially leading to capital flight. Lawmakers are likely to support changes to the Box 3 asset tax regime, requiring investors to pay annual tax on both realized and unrealized gains, totaling an estimated 2.3 billion euros ($2.7 billion).

Investors in equities, bonds, and cryptocurrencies could face annual taxation on paper gains under the proposal, with taxing only realized returns considered unworkable until 2028. Parties like VVD, CDA, JA21, BBB, D66, and GroenLinks–PvdA are expected to support the bill, arguing that taxing unrealized gains simplifies administration and prevents budget shortfalls.

The revised Box 3 system would benefit real estate investors more, allowing deductions for costs and taxation upon realizing profits, while second homes would face additional levies for personal use. However, the tax plan has faced backlash from investors and crypto figures, who warn of accelerated capital flight, with prominent Dutch analyst Michaël van de Poppe calling the plan “insane.”

Read more at Cointelegraph: Netherlands Plans Unrealized Gains Tax on Stocks and Crypto