Start with the Netherlands, because there it is no longer a discussion - it is law. The House of Representatives officially passed the "Actual Return in Box 3 Act", a tax reform that from January 2028 will require Dutch investors to pay 36% on actual annual returns from assets including crypto, stocks, and bonds. Sounds neutral enough, until you keep reading: the tax applies to unrealized gains. Your portfolio grew on paper - you pay. Whether you sold anything - irrelevant. Whether you received actual money - also irrelevant. The government records the value of your assets on January 1, and if the number went up, you owe.

The most obvious scenario that somehow did not concern the lawmakers: Bitcoin rises in January, you pay the tax, it crashes back by March. The money is gone. No refund. Losses can be carried forward to future periods, but that does not return the cash you already paid. State Secretary for Taxation Eugène Heijnen acknowledged during parliamentary debates that the government would have preferred to tax only realized gains, but that was "not feasible by 2028." Taxing money you do not have yet, however, is apparently very feasible.

What This Actually Means for Real People

Say you hold Bitcoin worth €50,000 at the start of 2028. By year-end it has grown to €70,000. You sold nothing. You received not a single cent. But you owe the government 36% of the €20,000 gain - that is €7,200 - in real cash, which you do not have, because you sold nothing. So you either sell part of your position to cover the tax bill, or you find cash from somewhere else.

For investors with diversified portfolios, this creates a mandatory annual liquidation event just to service tax obligations. For people holding crypto long-term, it is a direct hit to the strategy. For those with no free liquidity outside the assets themselves, it is forced selling by design.

A coalition of major parties has already announced plans to eventually shift toward a normal capital gains model - taxed on sales, not paper gains. Draft legislation is expected by Budget Day 2028. So the law is already passed, and they promise to rewrite it roughly around the time it takes effect. Convenient.

The European Union Looks at This and Says: We Want More

Against the backdrop of the Dutch law, on May 28 the European Commission published an internal document - a revenue projection tied to the EU's 2028-2034 budget cycle. Among the proposed funding sources: a 0.1% tax on every crypto transaction across the entire bloc. Projected yield: €3-4 billion per year. Combined with a separate crypto capital gains tax - up to €23 billion over seven years.

Important caveat: this is still a proposal, not a law. Passing it requires unanimous approval from all member states, which is no small task. But the direction of travel is clear, and France is already actively lobbying for new EU revenue sources.

0.1% sounds like nothing. But this is 0.1% on every transaction - not on profit, not on income, just on the fact that money moved. You bought - you pay. You sold - you pay. You swapped one token for another - you pay. You transferred to a different wallet - probably you pay too. An active trader with €1 million in monthly volume pays €1,000 just for the act of trading, regardless of whether they made or lost money.

Circle's EU policy lead Patrick Hansen pointed out the obvious problem: the tax will push users into DeFi, self-custody wallets, and platforms outside the EU. There, the EU collects nothing. The European Commission itself acknowledged that it is "difficult to precisely estimate potential tax revenue due to limited data." Which did not stop them from building budget plans around these figures.

America Writes Rules to Attract Capital. Europe Writes Rules to Explain the Exit Fee

The contrast with what is happening in the US needs no commentary. While the American Senate advances the GENIUS Act - creating predictable rules for stablecoins - and the CLARITY Act - dividing regulatory authority across the crypto market - European lawmakers are debating how much to take from each transaction and how to tax profits that do not yet exist.

Smart money reads this correctly. The Netherlands is already seeing discussions about relocation among large investors. Portugal and the UAE - with zero or minimal crypto tax - directly benefit from this dynamic. The tax geography of digital assets is being rewritten right now, and not in Europe's favor.

The Dutch law takes effect in 2028. The EU debates its proposal in June. There is still time before 2028 - the only question is what exactly to do with it.