Tim me-retweet
🇳🇱 DUTCH OFFICIALS HAVE OFFICIALLY REFUSED TO CANCEL THEIR NEW TAX ON "UNREALIZED GAINS."
Despite weeks of backlash from investors and international media, the Dutch government has not withdrawn the proposed Box 3 tax reform.
Instead, officials are allowing the process to continue while promising to make changes later.
The proposal, called the “Actual Return in Box 3 Act,” would change how investment income is taxed.
Under the current draft, investors would pay about 36% tax on their yearly investment returns.
But the key issue is how return is defined.
The proposal counts not only dividends, interest, and rental income, but also the yearly increase in the value of assets such as stocks, bonds, and crypto.
That means investors could owe taxes even if they have not sold their assets.
The Dutch parliament has already approved the law in the House of Representatives, and it is now moving through the Senate.
Recently, the new Secretary of State for Finance, Eelco Eerenberg, told lawmakers that the Senate can continue reviewing the proposal while the government works on adjustments.
The government does not plan to withdraw the bill.
Instead, officials say they will modify parts of it in stages.
The first step would involve technical changes to the current proposal, possibly including adjustments to how losses are handled.
The second step, which could come after 2028, is a longer term goal of shifting toward a capital gains system that taxes only realized profits.
But that change has not been designed yet and could take years to implement.
The reason this reform started in the first place is because the Dutch Supreme Court ruled that the old Box 3 system violated property rights.
Previously, the government taxed investment wealth based on assumed returns, even if investors earned less.
The new system is intended to tax actual returns instead of estimated ones.
However, the inclusion of unrealized gains has created strong criticism.
Many investors argue that taxing value increases before assets are sold can create cash-flow problems, especially during volatile market periods.
For example, if a portfolio rises sharply one year, taxes could be owed on that increase even if prices later fall.
Financial advisors have also warned that the Netherlands may remain one of the higher tax environments for portfolio investors in Europe, even if the system changes from estimated returns to actual returns.
For now, the timeline looks like this:
• 2025–2027: Temporary Box 3 rules remain in place.
• 2028: Target start date for the new actual return tax system.
• After 2028: Possible shift toward taxing only realized gains, depending on future legislation.
The key point is that the proposal has not been cancelled.
The government is continuing the legislative process while discussing modifications that may come later which we all know will never happen.
English
