The Dutch government is set to change the taxation method on unrealized gains, particularly affecting cryptocurrencies, starting in 2028. This move has sparked considerable concern and debate among crypto users and critics alike, though the situation is more complex than it appears. Unrealized gains refer to the increase in the value of an asset that has not been sold or exchanged, meaning the profit is not yet realized. Typically, many countries tax only realized gains, which occur at the point of sale. The Netherlands aims to make its tax system more comprehensive by reflecting the realities of the growing investment market. In the volatile world of cryptocurrencies, taxing unrealized gains is a complicated and contentious issue. Critics argue that it could place unnecessary pressure on investors and negatively impact market liquidity. Furthermore, the inherent instability of cryptocurrencies may cause financial difficulties for investors required to pay taxes on unrealized profits. This decision by the Netherlands reflects a global trend of increasing focus on cryptocurrency taxation, as governments worldwide seek new methods to enhance financial transparency and tax collection. In the coming years, this policy could influence other countries to adopt similar measures that balance market transparency with investor rights. However, careful consideration of legal complexities and market reactions will be essential to avoid adverse effects on the financial system.
Source: decrypt
