Before June 8, 2021, tax returns are mandatory for all French citizens. Crypto-assets, if you own them, are part of this obligation.
It can very quickly become difficult to report capital gains in the world of crypto-assets. Most crypto investors use multiple exchange platforms. They also regularly make account-to-account transfers.
They move and store their tokens on different storage wallets, and they buy and resell these digital assets at different prices.
Furthermore, staking, airdrops, and liquidity mining are ways to earn new tokens without buying or selling. Because of this, these earnings remain somewhat in a legal gray area regarding taxation.
In short, gathering all this data to calculate the exact capital gains quickly becomes a nightmare.
Key takeaways on French taxation for digital assets:
-> The declaration of the exchange platforms «digital asset accounts opened, held, used, or closed during the year with companies domiciled outside France.
-> The capital gains tax is 30 %.
-> Every year, there is a capital gains tax allowance of 305 euros: This means that if the overall capital gain does not exceed this amount, no tax is due.
-> Transactions of one digital asset with another digital asset are not taxable, including transactions with stablecoins.
Next, it is important to define your tax regime. Are you a retail investor or a professional investor?
This depends on the amounts exchanged, the number of transactions, the duration of the positions, and the expertise developed.
This assessment is up to the regulators and is done on a case-by-case basis. However, it is easy to know for yourself whether you are a professional or not.
We suggest you use the service of our partner Waltio for the tax assistance of your digital assets.
This will allow you to:
–> To easily retrieve your transaction histories from the exchange platforms.
–> To prepare your FEC (accounting entries file).
–> To assist you in calculating and reporting taxable capital gains.
–> To assist you in declaring foreign accounts.
To also be able to download their white paper on taxation for free.
It is a 15-page document written by tax lawyer Alexandre Lourimi of ORWL Avocats which will allow you to better understand cryptocurrency taxation. It is aimed at all individuals.
Click below to access the Waltio website:
