The Dutch government will tax profits from BTC by imposing capital gains taxes starting in 2028.

The Dutch government is preparing to tax Bitcoin in profits since 2028.

The Dutch government announced on Tuesday that it is preparing to propose taxation of capital gains from the year 2028 which could affect profits Bitcoin if the holder sells and makes a real profit. If this plan is approved, taxes will be levied when the profit actually occurs rather than collected on unsold value or hypothetical returns as at present.

From hypothetical returns to actual profits.
The Dutch cabinet sent a letter to the Senate announcing such plans, with key content stating that the viability of the Dutch economy requires an investment-friendly property tax policy.

According to the plan, most financial instruments will start being taxed from 2028 while other assets will change over the next two years. However, it is not clear whether digital assets will be taxed in 2028 or 2030.

For Bitcoin and digital assets in the Netherlands, taxation is currently based on pre-determined annual returns rather than actual profits or gains actually made by holders. The tax authorities consider that an asset generates a return of approximately 4% per year regardless of how much the holder actually makes.

The digital asset tax credit in Europe.
Regulations in Europe on digital assets and taxation vary, but are generally stricter than those in the United States. Since January, the European Union's DAC8 regulation requires providers of digital asset trading to store detailed information about users and businesses and then report it to their respective tax authorities, similar to what banks do for general accounting.

However, not all countries in the European Union are as stringent: Germany has exempted digital assets held for more than a year and Portugal followed suit after 365 days.

Something to keep an eye on.
The plan does not become law until it is approved, so it remains to be seen whether digital assets will fall into the tax bracket starting in 2028 or postponed to 2030 if switched to real profit collection. Holders of Bitcoin on a non-sale may not be charged with unrealized gains but those who have sold and made profits may pay taxes on actual gains.

This article was originally published on Bitcoin Magazine by Matthew Di Salvo.