Why the Netherlands' 36% Capital Gains Tax May Spark a Crypto Exodus
- The Dutch parliament just cleared a 36% tax on most liquid assets, including crypto.
- If enacted, long‑term savers could lose up to 43% of projected wealth.
- Historical parallels suggest a swift capital flight to friendlier jurisdictions.
- European peers are watching closely – the policy could reshape the continent’s investment landscape.
- Our playbook outlines concrete moves for both bullish and bearish outlooks.
You’re about to see how a 36% tax could wipe out half your crypto gains.
Why the Netherlands' 36% Tax Is a Game-Changer for Crypto Investors
The House of Representatives voted 93‑0 to push a bill that taxes savings accounts, equities, interest‑bearing instruments and, crucially, cryptocurrencies at a flat 36% rate – regardless of whether the asset is sold. That means every euro of unrealised gain sits on the taxman’s ledger each year. For a typical crypto‑savvy investor, the impact is massive: a 10,000‑euro seed fund that compounds at 6% annually for 40 years would have grown to €3.32 million in a tax‑free world, but under the new regime the same trajectory yields only €1.89 million – a €1.44 million shortfall.
Sector Ripple Effects: European Savings and Tech Markets
Beyond crypto, the tax blankets traditional savings products. European banks that rely on Dutch deposit inflows could see a measurable outflow, tightening liquidity in an already rate‑sensitive environment. Tech firms that offer employee stock‑option plans may need to renegotiate compensation structures, as the tax erodes the after‑tax value of equity awards. The broader sector trend is a move toward “tax‑efficient” jurisdictions – a pattern we’ve observed in Germany’s recent capital gains reforms and the UK’s “non‑resident” incentives.
Competitor Reaction: How France, Germany, and the UK Are Positioning Themselves
France’s 1997 wealth tax triggered a wave of entrepreneur relocation, a cautionary tale that Dutch policymakers seem to ignore. Germany, meanwhile, has kept capital gains on equities tax‑free for holdings over one year, positioning itself as a haven for long‑term investors. The UK’s “non‑domiciled” regime continues to attract high‑net‑worth individuals by exempting foreign‑sourced gains. As the Dutch bill heads to the Senate, these peers are quietly marketing their more permissive tax environments, potentially siphoning off Dutch capital before 2028.
Historical Parallel: France’s 1997 Tax Shock and the Entrepreneur Exodus
When France introduced a 75% wealth tax on assets exceeding €1 million, the country witnessed a 12% dip in venture‑capital funding over the next three years and a noticeable brain drain of tech founders. Many of those founders relocated to Switzerland, Luxembourg, or the United States, taking with them both talent and capital. The net effect was a slowdown in French R&D spending and a lag in startup formation relative to its EU peers. The Dutch proposal mirrors that shock factor, albeit at a lower rate, but the principle – high tax rates prompting capital flight – remains unchanged.
Technical Breakdown: Capital Gains Tax vs. Wealth Tax Explained
Capital Gains Tax (CGT) is levied on the profit realized when an asset is sold. The Dutch bill flips the script by taxing unrealised gains annually, effectively converting CGT into a wealth‑tax‑like drag on portfolios. Wealth Tax targets the total net worth of an individual, irrespective of income or transactions. While the Dutch model stops short of a full wealth tax, its 36% rate on unrealised gains creates a comparable incentive for high‑net‑worth individuals to relocate assets abroad.
Investor Playbook: Bull and Bear Scenarios
Bull Case: If the Senate stalls or amends the bill to a lower rate, the Dutch market could experience a short‑term rally as confidence returns. Investors might double‑down on Dutch‑based crypto funds, betting on regulatory clarity and a resilient tech ecosystem.
Bear Case: Assuming the 36% rate survives, expect a wave of capital flight. Strategic moves include:
- Re‑routing crypto holdings to jurisdictions with 0% CGT (e.g., Portugal, Malta).
- Utilising foreign‑based brokerage accounts that qualify for treaty‑based tax relief.
- Shifting employment compensation from equity to cash or phantom‑stock plans to avoid Dutch CGT exposure.
In short, the Dutch 36% capital gains proposal is more than a fiscal footnote – it’s a catalyst that could reshape European investment flows. Whether you view it as a warning signal or an opportunity to reposition, the time to act is now.