In 2021, the Dutch Supreme Court delivered the “Christmas Judgment”, declaring that the existing Box 3 system – based on notional returns – violated fundamental rights.
The core issue?
People were being taxed on fictitious profits, regardless of what they actually earned.
Now, the government is preparing a full system overhaul. But the proposed fix? It might go even further: From unfair estimates… to taxing unrealized gains. At 36%.
Yes, you read that right. You didn't sell anything. You didn't withdraw a single euro. But you'll owe € 21,600 in taxes. The proposed Box 3 legislation for 2028 isn't a "technical adjustment."
It's a fundamental shift in how investment taxation works. Here's what's on the table in The Hague:
👉 36% tax on gains you haven't realized yet.
👉 Paper profits. Money that exists only on your screen.
Let us paint the scenario:
You've been investing disciplined. Long-term focused. Building wealth systematically.
The market has a good year. Your portfolio shows €60,000 in gains. ✔️
Under the new system:
👉 You owe: €21,600+ to the tax authority
👉 Not because you sold anything. Not because you took profits. Not because you have cash flow. But because you're "richer on paper."
The likely result? 🧐
You'll have to sell shares to pay the tax bill.
Forced liquidation. Not by choice. By tax policy.
And it gets worse:
➡️ Year 1: Market up. You pay tax on unrealized gains.
➡️ Year 2: Market down. You lose money.
Do you get that tax back immediately? No.
You have to generate new gains first. Then you can offset.
The math:
➡️ Less capital remaining
➡️ Reduced compound growth
➡️ A deficit you may never recover
➡️ Long-term wealth building: severely damaged
Why this matters beyond the Netherlands 🤔
🧍 For Dutch tax residents:
This directly impacts your investment strategy and wealth accumulation.
🏦 For banks serving Dutch clients:
Your tax reporting just became exponentially more complex.
💸 For the industry:
This could be a precedent. If the Netherlands implements this, will other countries follow?
If this passes, banks will need to:
👉 Track unrealized gains per client per year
👉 Calculate 36% tax on paper profits
👉 Report gains that may disappear next year
👉 Help clients understand why they owe tax on money they don't have
👉 Provide documentation for forced asset sales
It's not just a tax. It's a structural impediment to wealth building. This isn't theoretical. This is proposed legislation for 2028. 🫣 And if you're building long-term wealth in the Netherlands, this fundamentally changes the game.
This isn't a 2028 problem. It's a 2025-2026 preparation challenge.
Dutch residents, expats, wealth managers – what's your take?
