France Halves Cryptocurrency Taxes

France Halves Cryptocurrency Taxes

France will tax profits from crypto sales as “movable property” capital gains. The country has lowered tax rates of up to 45 percent to 19 percent.

Earlier this year, France’s Supreme Administrative Court, on behalf of several taxpayers, was asked to rethink the taxation of bitcoins and other cryptographic transactions in force since July 2014.

Under the tax legislation, profits from the sale of cryptocurrencies in ordinary and continuous operations have been considered commercial and industrial profits, and occasionally non-profit profits. With this categorization, taxpayers were exposed to different tax rates, which could reach up to 45 percent.

As the French media reported to Le Monde, in this case some have been decided in favor of the taxpayer. The institution has decided to rethink the way in which profits from the sale of cryptocurrencies are being regulated and now considers these to be “movable property” profits. This means that the profits from crypto sales are taxed at a flat rate of 19 percent.

It was also stated that there will be “certain specific circumstances for the transaction of crypto asset values that may mean that they fall under provisions that relate to other income categories”. In other words, if the capital gains from activities other than e.g. Cryptocurrency revenues, or “bitcoin mining”, fall into the category of commercial and industrial profits, whether or not they are occasional activities. Therefore, these profits are taxed at the higher rate of 45 percent.

At the end of last year, AMF, the head of the French stock exchange regulator, commented on the topic of cryptocurrencies and said it could become a legitimate business in the future. However, the attitude of the country has changed several times in recent months. The governor of the Bank of France called for stronger regulation of the crypto exchanges.