I’ve been reading a lot of posts about the new tax law in the Netherlands, and it sounds absolutely ludicrous. Imagine buying one Bitcoin for, say, €60,000. It rises to €100,000 by the end of the year, but then collapses back to €60,000 at the start of the new year. You’d still end up paying around €12,000 in tax despite never actually realizing any profit.
To put it another way: Suppose you bought €100k worth of shares in 2027, but they dropped by €30k that same year. On the valuation date of 2028, your portfolio is worth €70k. During 2028, the market recovers and you make up that €30k loss. By 2029, your portfolio is back to €100k. You haven't made a net profit, but you have seen a 'capital growth' of €30k. At a tax rate of roughly 36%, you’d have to cough up over €10k while having gained nothing on your initial investment.
This sounds ridiculous to me, and i genuinely hope this doesn't get pushed through.
New tax law in Netherlands 2028: Paying tax despite never actually realizing any profit
byu/HQ_Husky inCryptoCurrency
Posted by HQ_Husky
8 Comments
It’s enough to make folks stop investing. I’d certainly ramp down my risk profile a lot.
Is the second example true? I thought the unrealized profit from the buy price would be taxed, not the (possibly lower) price of last year’s end.
You just described what’s wrong with the wealth tax.
How about unrealized loss?
This new tax law has not even been written up and submitted into the parliament.
By the looks of it right now the entire law will not even be submitted at all. And if it does our senate/Upper House/eerste kamer still has to vote on it.
So as it stands right now, it has only been an idea that had been up for dicussion in our House of representatives/tweede kamer and they voted yes on probably submitting the law. However this was years ago already if I am not mistaking.
It’s even more ridiculous when for example your portfolio grew from €100k to €200k, so you’d pay around €36k in taxes (36% over 100k “profit”).
Then the next year your 200k portfolio becomes 100k again and you get €0 back from the Dutch IRS. So you have paid €36k in taxes and have made €0 profit over 2 years.
The Dutch IRS blames you and says “should’ve sold mate”.
was this actually signed into law, or was it proposed?
because i can’t believe what I’m reading
I don’t know how the legislature in the Netherlands works but if it’s anything like the US legislative body such a law would never pass simply because it would hit the legislators harder than anyone else with all of their remarkable gains from insider trading.