It remains uncertain how the Netherlands will tax wealth in Box 3 from 2028 onwards. Politicians have been working on a new system for years and, although the House of Representatives has approved the proposal, decision-making in the Senate has been postponed. In the meantime, the debate is intensifying. Large companies such as Prosus and Booking have warned that the plans could harm the tech sector. But how significant are these concerns really? We called with APG economist Charles Kalshoven about the issue.
The current Box 3 proposal combines two forms of taxation. Savings and investments would be taxed annually based on the return achieved—whether realized or unrealized—while assets such as a second home or shares in start-ups would only be taxed when they are actually sold.
The first approach in particular, known as a capital gains accrual tax—where unrealized gains are also taxed—has met with resistance. Investors would have to pay tax on returns that remain “on paper” and have not yet been converted into cash.
Is the capital gains accrual tax harmful to the Dutch tech sector?
“To some extent, yes, but it should be put into perspective,” says Kalshoven. Start-ups and scale-ups that compensate employees with shares or options are exempt from this measure. However, larger companies, not only in tech, also use this form of compensation. “If you have to pay tax on paper gains while you have not yet sold the shares, that can create problems.” In such cases, a mismatch arises between taxation and liquidity: wealth on paper, but insufficient cash available to pay the tax authorities.
At the same time, Kalshoven argues that this is not the full story. “Taxes matter, but they are not the only factor determining whether tech companies remain committed to the Netherlands. Talent, access to capital, and regulation play at least as important a role.” This aligns with broader concerns about the investment climate. Kalshoven points out that policies regarding highly skilled migrants may be just as influential for both start-ups and larger companies.
What could be an alternative?
“That solution is already on the table: a majority of political parties support a full capital gains tax, under which investors only pay tax when they actually sell their shares. It is a straightforward alternative: taxation at the moment profits are realized. Many other countries use a similar approach,” says Kalshoven.
Critics argue that such a system would reduce government tax revenues in the short term. According to the APG economist, however, that picture is not entirely accurate. “From an economic perspective, it is primarily a timing issue. Revenue not collected today will still be collected later. Part of the challenge lies in the way government views cash flows. Under the current cash accounting system, the focus is on what comes in and goes out today, while future revenues are less visible. Yet when it comes to innovation and entrepreneurship policy, it is important to take a long-term perspective,” he says. “The real question is: which tax structure contributes sustainably to growth and innovation?”
Kalshoven also mentions a more unconventional alternative: allowing taxpayers to settle their tax liabilities in shares. “In that case, the government would build a stake in innovative companies, which could create greater alignment of interests.” At the same time, he clearly classifies the idea as a thought experiment—interesting in theory, but accompanied by practical and implementation challenges. In the same category, he suggests that companies could, if necessary, lend money to employees to help them meet their tax obligations, using the shares as collateral in the meantime. “If employee liquidity is the problem, that would be a targeted solution.”