Understand everything about cryptocurrency taxation in France

Cryptocurrency regulation in France is a complex subject, but essential to master to avoid unpleasant tax surprises. Whether you are an occasional investor or an active trader, it is crucial to know your tax obligations. Here is a complete guide to understand everything about crypto taxation in France.

1. The basics of crypto taxation

In France, cryptocurrencies are considered digital assets. They are subject to specific taxation depending on their use:

  • For individuals: Profits made from the sale or exchange of cryptos are taxed.

  • For professionals: Traders considered professional are subject to a different regime.

2. Personal taxation

For individuals, gains from cryptocurrencies are subject to the flat tax regime (single flat-rate deduction - PFU):

  • Tax rate: 30% (12.8% income tax + 17.2% social security contributions).

  • Exemption threshold: Transactions below €305 per year are exempt.

  • Calculation of profits: Profits are calculated based on the difference between the purchase price and the sale price.

Example: If you buy 1 Bitcoin for €20,000 and resell it for €30,000, your taxable gain will be €10,000.

3. Reporting obligations

In addition to paying tax on winnings, you must comply with certain administrative obligations:

  • Account reporting: If you are using a foreign platform (like Binance or Kraken), you must report your foreign account (form #3919).

  • Capital Gains Reporting: Capital gains must be reported on Form 2086 when you file your tax return.

4. Taxation of professionals

If you are considered a professional trader, your profits are subject to income tax under the category of industrial and commercial profits (BIC). This includes:

  • Active traders with high volumes.

  • People using complex strategies (trading bots, arbitrage, etc.).

The tax rate varies depending on your marginal tax bracket.

5. Special cases

Some cases require special attention:

  • Staking and yield farming: Rewards from staking or farming are considered income and must be declared.

  • NFTs: Proceeds from the sale of NFTs are subject to similar rules to cryptos, but specificities may apply.

  • Losses: Losses can be deducted from taxable gains under certain conditions.

6. Practical advice

To comply with regulations while optimizing your taxes, here are some tips:

  • Keep track of all your transactions: Keep a log of purchases, sales, transfers, and associated charges.

  • Use analytics tools: Platforms like CoinTracking or Koinly can help you calculate your earnings and generate tax reports.

  • Consult an accountant: If your situation is complex, a professional will be able to guide you.

Conclusion

Cryptocurrency taxation in France is strict, but with good organization and an understanding of the rules, you can avoid mistakes and optimize your tax obligations. Take the time to properly declare your accounts, calculate your earnings, and respect the deadlines to remain in compliance with the law. If in doubt, call on a specialist to avoid any problems with the tax authorities.