The Dutch government wants you to invest more. Europe needs more risk capital. So naturally, they’ve designed a tax system that punishes anyone brave enough to actually do it. Starting in 2028, the new Box 3 (wealth tax box) reforms will tax the paper gains on your investments, money you haven’t actually made yet, at rates that make you wonder if saving was the real crime all along.
This isn’t a minor tweak. It’s a fundamental shift that treats long-term investors as piggy banks for the treasury, forcing them to sell assets during market downturns just to cover tax bills on phantom profits. And while the middle class gets squeezed, the truly wealthy are already redirecting their assets through Box 2 (corporate tax box) structures, leaving regular savers to carry the burden.
The 6.37% Phantom Profit Problem
Here’s how the math breaks down. The Belastingdienst (Tax Authority) will assume your investments generate a 6.37% return in 2027, regardless of what they actually do. On that fictional profit, you’ll pay 36% tax. For someone with €100,000 in ETFs, that’s a tax bill of roughly €2,102, even if your portfolio lost money that year.
The impact of Box 3 on Financial Independence, Retire Early (FIRE) planners is particularly brutal. A 34-year-old medical professional with €250,000 in European ETFs explained that this tax, combined with inflation and existing wealth taxes, will likely devour his entire portfolio before he can semi-retire at 45. His plan was modest: part-time work, volunteer work, covering his children’s education, and taking regular vacations. Now, he’s calculating whether he can retire at all.
Forced Sales and the Liquidity Trap
The most dangerous aspect of the taxation of investments before cashing out, fueling investor revolt is the liquidity problem it creates. Many long-term investments, private company shares, closed-end funds, real estate, can’t be sold quickly. Yet the tax is due in cash, every year, like clockwork.
Imagine holding shares in a promising Dutch startup. The valuation jumps on paper after a funding round, but you can’t sell because you’re locked in as an early investor. The Belastingdienst doesn’t care. They want their cut of your unrealized gain, payable immediately. If you don’t have the cash, you might be forced to sell other assets at a loss, take out expensive loans, or default and face collection actions.
The Regressive Reality: Box 2 vs Box 3
The wealthy aren’t worried. They’ve already moved their assets into Box 2 structures, typically a Besloten Vennootschap (private limited company) where corporate tax rates apply and wealth tax is avoided entirely. The new Box 3 rules don’t touch them. They’re designed for people with “serious wealth”, as one observer put it, leaving the working middle class to fund the treasury.
This creates a system where a doctor with €250,000 in index funds pays wealth tax, while a multi-millionaire with assets in a BV pays none on the same capital. The debate over whether the Box 3 reform is fair or punitive isn’t theoretical, it’s playing out in real time, with predictable outcomes.
Political Betrayal and the FIRE Exodus
The anger isn’t just about money, it’s about broken promises. Multiple voters who supported parties opposing these reforms now feel betrayed as those same parties vote yes to pass them. The sentiment among international residents and Dutch nationals alike is that politicians excel at doing the opposite of what they promise, labeling it as “compromise.”
The threat of unrealized gains derailing FIRE strategies in the Netherlands has sparked serious discussions about emigration. When your government treats diligent saving as a taxable offense while letting the truly wealthy off the hook, staying stops making financial sense. Social media threads are filled with once-unthinkable questions: “Where should we move?” “Is Portugal still an option?” “What about Spain’s Beckham Law?”
The Legal Storm Coming
The Hoge Raad (Supreme Court) already struck down the old Box 3 system for taxing fictional returns. The new system replaces one unfairness with another by taxing actual returns, but only the positive ones, and before they’re realized. Legal experts predict a mountain of lawsuits, particularly around the inability to offset losses against gains.
One commenter noted that the government hires the most expensive lawyers to prosecute its own citizens when they can’t pay. This creates a Kafkaesque situation where you’re taxed on money you don’t have, then bankrupted by legal fees trying to fight it. The lack of symmetry, taxes on gains but no relief for losses, violates basic principles of fair taxation.
What You Can Actually Do
If you’re sitting on investments and watching this unfold, you have limited options but some clear actions:
Calculate your exposure. Use the 6.37% deemed return to estimate your 2028 tax bill. If it’s more than you can pay from income, you need a plan.
Consider the BV route. For those with €100,000+ and a long-term horizon, restructuring through a Besloten Vennootschap is becoming standard advice. The how freelancers may need to restructure as BVs to cope with Box 3 changes discussion applies to investors too. Yes, it’s extra bureaucracy and cost, but it may be the only way to preserve your capital.
Join the opposition. A petition at box3eerlijk.petities.nl is gathering signatures. While petitions rarely reverse policy, they signal political risk. Combined with expected legal challenges, widespread opposition might force amendments.
Plan for forced liquidity. If you can’t or won’t restructure, start building a cash reserve equal to your expected Box 3 tax. This means selling some investments preemptively each year, the exact behavior the policy discourages, but necessary for survival.
Watch the implementation. The Eerste Kamer (Senate) hasn’t voted yet, and technical implementation problems could delay or modify the rules. The system requires accurate valuation data for millions of investment positions, a massive IT challenge the Belastingdienst might not meet by 2028.
The Bottom Line
The Netherlands is about to become one of the only countries taxing wealth this aggressively on unrealized gains. While politicians claim they’re targeting “the rich”, the numbers show they’re hitting the upper middle class, people who saved diligently, invested responsibly, and planned for modest early retirement.
The wealthy will adapt through Box 2. The poor aren’t affected. The people in the middle are left with an impossible choice: accept that a third of your paper gains go to the state, pay thousands in fees to restructure, or leave the country you call home.
That’s not tax policy. That’s a warning to anyone who thinks saving for the future is still a viable strategy in the Netherlands.
