The Tax That Taxes Dreams
On February 12, 2026, the Dutch House of Representatives made a decision that could fundamentally reshape the Netherlands' position as a European startup hub: they approved a 36% tax on unrealized gains: profits you haven't actually made yet.
Starting January 1, 2028, if your investment portfolio grows by €10,000 on paper, you'll owe the Dutch tax authority €3,600. Even if you haven't sold a single share. Even if you can't access that money. Even if the value crashes the following week.
Welcome to the Netherlands' bold new experiment in taxing wealth that doesn't exist yet.
What Just Happened?
The Wet werkelijk rendement box 3 (Actual Return in Box 3 Act) passed with 93 votes, well above the 75 needed. The legislation creates a two-track system that fundamentally changes how investment income is taxed:
Track 1: Capital Growth Tax (Vermogensaanwasbelasting)
- Applies to stocks, bonds, cryptocurrencies, and Bitcoin
- Taxes the annual increase in market value from January 1 to December 31
- Whether or not you sell anything
- Flat rate: 36%
Track 2: Capital Gains Tax (Vermogenswinstbelasting)
- Applies to real estate and qualifying startup shares
- Taxes appreciation only upon sale, gift, emigration, or death
- Annual income (dividends, rent) still taxed yearly
The government replaced the old €57,684 tax-free capital threshold with a €1,800 tax-free annual return. This means approximately 400,000 additional taxpayers will suddenly need to file.
The Startup Carve-Out: A Temporary Lifeline
Here's where it gets interesting for the startup ecosystem. The government included specific exemptions that shield some players:
Who's Protected (For Now):
Founders with substantial interest (>5% ownership)
- Taxed under Box 2's aanmerkelijk belang regime
- Pay tax only on dividends received and capital gains upon sale
- A founder whose startup reaches unicorn valuation owes zero tax on that paper appreciation
Angel investors in qualifying startups
- Companies must be incorporated ≤5 years ago
- Annual revenue <€30 million, so in many cases most bootstrapping entrepreneurs are safe.
- Not >25% owned by a non-startup business
- Receive capital gains treatment: tax only upon realization
This exemption exists thanks to a October 2023 Techleap-commissioned report by Archipel Tax Advice, which used case studies of Dutch tech companies to demonstrate the existential threat to angel investing.
The Cliff That Creates Perverse Incentives
But here's the catch: when a startup outgrows the exemption criteria (exceeding five years of age or €30 million in revenue) a deemed sale is triggered. Small shareholders suddenly shift to the capital growth tax regime, facing annual taxes on unrealized gains.
This creates a nightmare scenario: companies are incentivized to stay small, stay young, and avoid crossing arbitrary thresholds that have nothing to do with business fundamentals.
The Real Threat: What About Everyone Else?
While founders and early-stage angels got exemptions, the broader innovation ecosystem faces significant risks:
Venture Capital Limited Partners
Traditional Dutch commanditaire vennootschappen (limited partnerships) are "looked through" to underlying assets. If those assets don't qualify for the startup exemption, LPs face annual unrealized gains taxation at 36%.
This directly impacts:
- Family offices investing in VC funds
- High-net-worth individuals backing innovation
- Institutional investors in Dutch venture capital
The Liquidity Nightmare
The government's own explanatory memorandum acknowledges the "liquidity risk" directly; it was the stated reason for exempting real estate and startup shares. But what about everyone else?
Consider a female entrepreneur who:
- Bootstraps her company for 3 years
- Takes on angel investment in year 4
- Crosses €30 million revenue in year 6
- Watches her early angel investors suddenly face 36% annual taxes on paper gains they can't access
Those angels might demand liquidity events, push for earlier exits, or simply stop investing in Dutch startups altogether.
The International Context: Running Against the Tide
While the Netherlands introduces one of the world's most aggressive unrealized gains tax regimes, its European competitors are moving in the opposite direction:
- UK: Expanding startup investment incentives
- France: Enhancing tax breaks for innovation
- Germany: Increasing support for venture capital
- Italy: Introducing new startup-friendly tax measures
A 2023 survey by the Dutch Association of Tax Advisors found that none of 12 comparable countries uses a capital growth tax of this kind.
The Capital Flight Warning
Tax advisors at Meijburg/KPMG have explicitly warned that the capital growth tax "is internationally divergent and may encourage high-net worth individuals to emigrate for tax reasons".
The data backs this up. When Norway raised its wealth tax rates to 1.0-1.1%, capital flight accelerated. While wealth tax revenue rose from NOK 18 billion (2021) to NOK 32 billion (2023), the long-term sustainability remains questionable.
The Startup Ecosystem Impact: Death by a Thousand Cuts
For female founders and startup entrepreneurs, this law creates multiple pressure points:
1. Reduced Angel Investment Pool
Even with exemptions, the psychological impact matters. High-net-worth individuals who might have deployed capital into Dutch startups now face:
- Complex compliance requirements
- Administrative burden tracking annual valuations
- Risk of triggering taxes if startup "graduates" from exemption
- Simpler alternatives in competing European markets
2. Pressure for Earlier Exits
Investors facing potential unrealized gains taxes may push for:
- Faster liquidity events
- Earlier M&A instead of building for scale
- Conservative growth strategies to stay under revenue thresholds
- Relocation to friendlier jurisdictions
3. Brain Drain Acceleration
The Netherlands already ranks 22nd out of 25 countries for international employee participation schemes. This tax adds another reason for top talent to consider:
- London (enhanced capital gains treatment)
- Berlin (improving startup ecosystem)
- Stockholm (mature startup infrastructure)
- Paris (aggressive startup tax incentives)
4. The Hidden Tax on Ambition
Perhaps most insidiously, this law taxes potential. It tells entrepreneurs: "We'll tax your success before you've actually succeeded." That's fundamental misunderstanding of how innovation works.
The Political Reality: A Law Nobody Actually Wants
Here's the twist: even the politicians who voted for this bill don't want it.
A parliamentary majority, including parties that voted yes, passed motions demanding the government present a realized-gains-only alternative by Budget Day 2028. That's before the unrealized gains system has even fully launched.
State Secretary Eugène Heijnen himself called the bill "an intermediate step". The new coalition government's January 2026 agreement explicitly states the intention to convert Box 3 to a pure capital gains tax.
Why Pass a Law You Plan to Repeal?
The answer is depressingly simple: money and constitutional pressure.
The Dutch Supreme Court ruled the old "fictitious returns" system unconstitutional in December 2021. The government needed a constitutional alternative by 2028. Each year of delay costs the treasury an estimated €2.3-2.4 billion.
So they passed a law that:
- Tax advisors warn against
- International experts condemn
- The government itself plans to replace
- Creates perverse incentives nobody wants
All because the only constitutional alternative the tax authority could implement by 2028 was a mark-to-market system.
What This Means for Female Entrepreneurs
As female founders in the Dutch startup ecosystem, you need to understand several critical implications:
1. Angel Investor Conversations Will Change
Expect more questions about:
- Revenue growth projections (to stay under €30M threshold)
- Timeline to profitability (to minimize time in exemption risk)
- Exit strategy (earlier liquidity expectations)
- Jurisdiction considerations (where to incorporate?)
2. The Five-Year Clock Becomes Critical
That five-year age limit for startup exemptions creates an artificial urgency. Companies will face pressure to:
- Exit before the clock runs out
- Restructure to reset the timer
- Relocate to jurisdictions without such cliffs
3. Employee Stock Options Get More Complicated
While the government introduced improvements for stock options in innovative startups (reducing taxable base to 65% as of January 2027), the unrealized gains tax creates new concerns for employees who become small shareholders.
4. Your Personal Investment Strategy Needs Review
As a founder, you're likely exempt under Box 2 (if you hold >5%). But your personal investments outside your startup? Those face the 36% unrealized gains tax. This affects:
- Diversification strategies
- Personal wealth management
- Retirement planning
- Investment in other startups
The Innovation Box Irony
The Netherlands offers one of Europe's best incentives for innovation: the Innovation Box, which taxes qualifying R&D profits at just 9% instead of the standard 19-25.8% corporate tax rate.
To qualify, companies need:
- A WBSO (R&D tax credit) certificate
- Proven R&D activities
- Profits derived from innovation
The government simultaneously says:
- "We want to be a Top 5 Startup Nation"
- "Here's a 9% tax rate on innovation profits"
- "But also, we'll tax paper gains at 36% annually"
It's policy schizophrenia. You can't incentivize innovation with one hand while taxing potential with the other.
What Can Be Done?
For Individual Founders and Investors:
1. Understand Your Status
- If you hold >5% of your company: You're in Box 2 (safe from unrealized gains tax)
- If you're an angel in qualifying startups: Monitor the age/revenue thresholds carefully
- If you invest outside startups: Prepare for annual tax bills on paper gains
2. Plan Around the Cliffs
- Track your portfolio companies' age and revenue
- Understand when exemptions expire
- Consider exit timing strategically
3. Explore Restructuring Options
- Discuss with tax advisors whether corporate structures can optimize treatment
- Consider holding companies or alternative investment vehicles
4. Document Everything
- The €1,800 tax-free return threshold requires proving your actual returns
- Loss carry-forward provisions (for losses >€500) need documentation
- Keep meticulous records of valuations and transactions
For the Ecosystem:
1. Continued Advocacy The government has already committed to revisiting this. Organizations like Techleap, VNO-NCW, and startup advocacy groups need continued pressure to ensure the 2028 replacement actually happens.
2. Public Education Most Dutch taxpayers don't understand this law yet. When 400,000 additional taxpayers start filing in 2028, the backlash will be significant. Prepare the narrative now.
3. International Benchmarking Continuously highlight what competitors are doing. When France, UK, and Germany offer better terms, make that comparison impossible to ignore.
4. Alternative Proposals Work with tax experts to develop specific, implementable alternatives that:
- Tax only realized gains
- Maintain constitutional compliance
- Generate necessary revenue
- Don't create perverse incentives
The Bigger Picture: Europe's Innovation Problem
This law is a symptom of Europe's broader struggle with innovation economics. While the US raised $238 billion in venture capital in 2023, Europe managed just €50 billion.
Europe's share of global venture capital has been declining for years. The Netherlands specifically (despite strong fundamentals, world-class universities, and a historic entrepreneurial culture) has struggled to scale winners.
The Startup Scale-Up Gap
The Netherlands produces excellent early-stage startups but underperforms at scaling them. This tax makes that problem worse by:
- Reducing available growth capital
- Incentivizing premature exits
- Discouraging long-term patient capital
- Creating artificial thresholds that punish success
What Female Founders Need to Remember
You didn't start your company to optimize tax treatment. You started to solve problems, build solutions, and create value. This tax law is a headwind, but it's not insurmountable.
The Dutch ecosystem has real strengths:
- Strong technical talent pool
- Excellent universities and research institutions
- Mature startup infrastructure in Amsterdam, Rotterdam, Eindhoven
- Access to European markets
- Relatively business-friendly regulations (outside this tax)
The Path Forward
The unrealized gains tax represents a fundamental misunderstanding of how innovation works. You can't tax potential into existence. You can't regulate your way to breakthrough success. You can't create a thriving startup ecosystem while punishing the capital that funds it.
But here's the reality: this law will likely be replaced before it's fully implemented. The political will doesn't exist to sustain it. The government knows it's problematic. The opposition is building.
What You Should Do Now:
Immediate (2026-2027):
- Assess your personal exposure and company structure
- Engage qualified tax advisors who understand startup dynamics
- Monitor legislative developments closely
- Plan for multiple scenarios (law proceeds, law modified, law replaced)
Medium-term (2027-2028):
- Participate in public consultations and advocacy efforts
- Share your story: how this law impacts your business and funding
- Connect with other founders facing similar challenges
- Consider jurisdictional strategies if the law proceeds unchanged
Long-term (2028+):
- Build resilience in your business model regardless of tax treatment
- Diversify funding sources to reduce dependence on affected capital pools
- Stay engaged in policy discussions to prevent future harmful regulations
- Remember: great companies succeed despite regulatory headwinds
Conclusion: A Test of Dutch Innovation Resolve
The Netherlands faces a choice. It can be a European innovation leader, a place where ambitious founders build world-changing companies, where patient capital finds compelling opportunities, where risk-taking is celebrated and rewarded.
Or it can be a cautionary tale, a country that taxed paper gains at 36%, watched capital flee, saw startups relocate, and wondered why its innovation economy stagnated.
The unrealized gains tax currently points toward the latter. But nothing is set in stone.
Female founders, angel investors, and the broader Dutch startup community have a voice. Use it. The time to shape this policy is now, before January 2028, while the government is still receptive to alternatives.
Because when you tax dreams before they're realized, you don't generate revenue. You just make people dream somewhere else.
Key Takeaways
✅ Exemptions exist but are limited: Founders with >5% ownership and angels in young startups (<5 years, <€30M revenue) are temporarily protected
⚠️ Exemptions expire: When startups exceed age/revenue thresholds, a deemed sale triggers, shifting investors to unrealized gains taxation
❌ Broader ecosystem hit: VCs, LPs, and high-net-worth individuals investing outside exempted categories face 36% annual taxes on paper gains
🚨 International disadvantage: No comparable country uses this system; competitors are enhancing startup incentives while Netherlands moves opposite direction
⏰ Temporary law: Government already committed to replacement by 2028, but implementation deadline approaches
💡 Action required: Founders and investors need immediate tax planning, medium-term advocacy engagement, and long-term business resilience
