The Dutch government is taking a step back on its controversial plan to tax unrealized gains on cryptocurrencies and other assets. Finance Minister Eelco Heinen announced on Wednesday that the recently passed bill will undergo a review and potential amendments following backlash from lawmakers and investors. The document provides a justification for the fact that this decision comes in response to widespread criticism and concerns about its impact on the crypto market.
Proposed Tax System Overview
The proposed tax system, known as the Actual Return in Box 3 Act, aims to impose a 36% tax on the annual change in value of crypto and other assets, regardless of whether they have been sold. Heinen acknowledged the need for changes, stating, 'I don't think the law can go through as it stands.' This indicates a willingness to address the concerns raised by stakeholders before the law is set to take effect on January 1, 2028.
Discussions and Consultations
Heinen has already initiated discussions with his state secretary and plans to consult with both the House of Representatives and the Senate to explore possible amendments. He emphasized that there is ample time to revise the tax overhaul, which has faced significant criticism from local investors worried about the implications of being taxed on unrealized gains.
Background on Box 3 System
The previous Box 3 system, which taxed investors based on assumed returns, was ruled unfair and unsustainable by the Supreme Court, leading to the development of the new model. However, critics argue that their concerns regarding the new bill were overlooked during its progression to the Senate, raising fears of wealth migration to more favorable jurisdictions.
Recently, the Dutch government proposed a 36% capital gains tax that could significantly affect the cryptocurrency market, raising concerns among investors. For more details, see read more.
