By Sama Marwan,
In France, cryptocurrency gains are subject to taxation, with the specifics depending on the nature of the transactions and the investor’s status.
Current Taxation Framework (as of 2024):
- Occasional Investors: Individuals making infrequent cryptocurrency transactions are subject to a flat tax rate of 30% on capital gains, known as the Prélèvement Forfaitaire Unique (PFU). This rate comprises 12.8% income tax and 17.2% social security contributions.
- Professional Traders and Miners: Those engaged in cryptocurrency activities on a professional basis are taxed under the regime of non-commercial profits (Bénéfices Non-Commerciaux or BNC), with rates reaching up to 45%, depending on the total annual income.
Proposed Changes for 2025:
- Increase in Flat Tax Rate: The French government has proposed raising the flat tax on capital income, including cryptocurrency gains, from 30% to 33%, effective from 2025. This adjustment aims to boost tax revenues and align taxation policies with evolving financial landscapes.
- Taxation of Unrealized Gains: A proposal under consideration seeks to classify Bitcoin and similar digital assets as non-productive wealth, potentially subjecting unrealized capital gains to taxation. If implemented, this would mean that increases in the value of cryptocurrency holdings could be taxed even if the assets are not sold.
Additional Considerations:
- Tax-Free Threshold: Capital gains from cryptocurrency disposals up to €305 per year are exempt from taxation, providing minor relief for small-scale investors.
- Non-Taxable Transactions: Certain activities, such as trading one cryptocurrency for another, purchasing crypto with fiat currency, holding crypto, and transferring crypto between personal wallets, are not considered taxable events under the current guidelines.
Given the dynamic nature of cryptocurrency regulations and potential legislative changes, it is advisable for investors to consult with tax professionals or refer to official resources to ensure compliance with the latest tax obligations in France.
France Proposes Taxation on Unrealized Bitcoin Gains
