Netherlands moves to soothe rich investors over tax on paper profits

The Dutch government is preparing to soften a contentious tax that would hit wealthy investors and has placed the Netherlands at the center of a global debate over levies targeting the rich.

Dutch investors are balking at plans that would subject them to an annual 36 per cent tax on their paper profits on liquid assets such as savings, equities, bonds and cryptocurrency, even if they are not sold.

The regime, due to come into force in January 2028, would make the Netherlands an outlier among most advanced economies in its taxation of unrealized gains.

Prime Minister Rob Jetten’s coalition is now preparing a series of concessions following sustained criticism from investors and business groups, who argue the measure risks undermining the country’s attractiveness as an investment destination.

“The government takes these concerns seriously. It is exploring ways to soften the consequences of the accrual-based tax and is working out possible options, which will be presented before the end of June,” a spokesperson for the Minister for Tax Affairs, Tax Administration and Customs told the FT in a statement.

While the concessions, if approved, are expected to soften the regime’s impact, they are unlikely to satisfy demands for the capital gains accrual tax under the “Box 3” system, which sets out how wealth from savings and investments is treated, to be scrapped immediately.

The Dutch dispute is the latest example of the political challenges governments face changing taxes that hit the wealthy. In California, proposals for a “billionaire’s tax” have opened a sharp political divide. Several European countries, including Norway and France, have adjusted their wealth tax regimes after pushback from investors.

The Dutch reforms, first put forward in May 2025, are intended to address historic unfairness in the previous system, under which investors were taxed on notional returns — an approach that courts ruled unlawful. But the proposed replacement, which treats liquid and illiquid assets differently, has sparked an outcry over its workability, fairness and complexity.

Taxing unrealized gains creates “severe liquidity issues and administrative burdens for retail investors”, said Daniël van Meijgaarden, head of international tax and legal at aaff, a Dutch accounting firm.

The government is considering the introduction of loss carry-back, allowing investors to offset losses against previously taxed paper gains. It is also examining a new definition for start-ups and scale-ups, a major point of contention in determining which assets would be exempt from the accrual tax.

Under the proposed legislation, start-ups, scale-ups and immovable property would be exempt from the accrual-based regime and instead be taxed when gains are realised.

The uncertainty surrounding the legislation has already “demoralised investors”, said Harsh Patel, founder and chief executive of Water & Shark, an accountancy and legal firm. “It is not right to tax something that has not come into your pocket.”

The new Box 3 system applies to Dutch private taxpayers. It will not apply to institutional and many foreign investors, said the government.

For more information see Josephine Cumbo “Netherlands moves to soothe rich investors over tax on paper profits” Financial Times, June 6, 2026.