Income tax France
Any individuals who partake in occasional trading must declare all cryptocurrency sales on their yearly tax returns, stating all capital gains they made that year. Individuals and companies who control overseas accounts must also declare all sales on their yearly returns or face fines.
However, if you’re a professional trader (someone who generates most of their income from trading), you’ll be subject to a special crypto tax France regime called the BIC. This assessment will be based on your trade volume and the gains you make.
Okay, take a deep breath, we’re getting technical….when crypto is exchanged for fiat currencies, no VAT is due on the value of the cryptocurrency or fees charged by the intermediary. Charges made over and above the value of the cryptocurrency for arranging or carrying out any transactions in bitcoin, except forex transactions with official currencies, are subject to VAT. Acquiring products or services via cryptocurrency payments is also subject to French VAT. However, the sale of cryptocurrencies is not subject to VAT unless made for the purpose of obtaining income on an ongoing basis. Got that?
As with most countries, holding crypto in your wallet and sitting on it, or transferring it between wallets incurs no tax, but make sure you aren’t getting confused –it’s easy to do – between transferring them, transacting them, or disposing of them.
The French government famously ruled that it was to cut the income of French crypto tax on gains from cryptocurrency sales from 45% to a flat rate of 19%. Isn’t that good news? It ruled that cryptocurrency sales should be considered as capital gains of ‘movable property’ – such as cars or jewels for example and meaning they are eligible for a lower french crypto tax rate than was previously the case.
Crypto sales under 305 € per year are completely tax-exempt and need not be declared.
This change was partly a result of a private case brought about by investors, challenging the tax rates that had been in force relating to the sale of bitcoin and other cryptocurrencies.
Tax when moving residency
As with any income, your bitcoin will come under the tax laws of the country where you are legally resident. If you move outside France but are still a resident, make sure you have detailed transaction reports about your purchases and sales across all French crypto exchanges you used. If you set up a business to trade crypto, that business will come under the tax laws of the country it operates from.
French crypto tax on mining
Mining is fantastically complicated and beyond the scope of most individuals. To bring things back to earth, mining for bitcoin or any other cryptocurrencies is, you guessed it, a taxable event. In France, the mining of crypto by individuals is taxed as income, and the taxable amount is the net profit you make on your mined coin. In general, profits from cryptocurrency speculation and mining are treated as industrial and commercial profits subject to the prevailing income tax scale.