France has announced a new crypto tax, adding Bitcoin to a list of its taxed assets. According to its announcement, the country intends to tax unrealized Bitcoin capital gains. The government, in its new initiative, is going after unproductive wealth. The assets include private jets, luxury cars, yachts, and now Bitcoin, which was added to the mix.
According to the French authorities, these items generate indirect income, a logic that the country has put into consideration. With this, French authorities believe that since it does not generate income directly, it should be taxed harder compared to other assets. However, analysts have kicked at the new rule, claiming it could scare investors away from the country’s Bitcoin space while stifling innovation.
France’s Bitcoin tax at a glance
Crypto taxes in France are not new, with the country launching taxes in the industry five years ago. France created the tax law under Article 150 VH bis of its General Tax Code. This means that crypto users must pay taxes provided they earn €305 from trading Bitcoin annually. However, users who earn less than the figure annually are not mandated to pay taxes but must declare all their transactions.
In France, the flat tax system is used to calculate crypto profits, which often puts the combined crypto tax around 30%. When used to calculate income tax, it accumulates to 12.8%, while it accumulates to 17.2% for social security contributions. While it sounds easy to the ears, France decided to include a twist in 2023. In its progressive tax scale, the country’s 2023 tax (reported in 2024) gave people in the lower brackets under €27,478 a slight tax break. The people only paid 28.2% instead of 30%.
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