The Dutch government is preparing to ease a planned tax on unrealised investment gains amid growing backlash from wealthy investors and business groups. The proposed measure, set to take effect in January 2028, would impose a 36 percent annual tax on paper profits from liquid assets such as savings, equities, bonds, and cryptocurrency, regardless of whether those assets have been sold.

This tax proposal has positioned the Netherlands at the center of a broader global discussion on how to tax wealth effectively. The regime marks a significant departure from the practices of most advanced economies by targeting unrealised capital gains, a move driven initially by a hard-right coalition that included Geert Wilders’ populist Party for Freedom.

Since taking office in February, Prime Minister Rob Jetten’s coalition—headed by the Liberal D66 party, which was not part of the previous administration—has signaled its intent to revise the tax plan in response to widespread criticism. Investors and various business organizations have warned that the tax could deter investment and damage the country’s economic competitiveness.

A spokesperson for the minister responsible for Tax Affairs indicated that the government is actively exploring ways to mitigate the impact of the accrual-based tax. Options being considered include introducing loss carry-back provisions, which would allow investors to apply losses against previously taxed unrealised gains. Officials are also reviewing the criteria for exemptions, particularly concerning startups and scale-ups, whose assets would be exempt under current proposals and instead taxed upon realisation of gains. Additionally, immovable property would be treated similarly under the plan.

The reform aims to rectify perceived inequities in the prior "Box 3" system, which taxed investors based on assumed returns rather than actual income or gains. This earlier approach was struck down by courts as unlawful, prompting the government to seek an alternative framework. However, critics contend that the new system's treatment of liquid and illiquid assets differently introduces complexity and fairness issues. Daniël van Meijgaardten, head of international tax and legal at Dutch firm aaff, cautioned that taxing unrealised gains could cause liquidity challenges and impose administrative burdens on retail investors.

The Dutch debate reflects wider international tensions around wealth taxation. For example, California has seen sharp divisions over proposed billionaire’s taxes, while countries such as Norway and France have recently adjusted their wealth tax policies following investor concerns.

The government plans to present detailed proposals on potential concessions before the end of June. While these adjustments may lessen some immediate effects of the tax, they are unlikely to satisfy calls for the full repeal of the accrual tax under the Box 3 system. The final outcome remains closely watched by market participants assessing the Netherlands’ evolving position as an investment hub.