The French Council of State now considers the profits generated by cryptocurrencies as capital gains of movable property that will be taxable at a flat rate of 19 percent instead of the previous 45 percent rate.
France cuts down crypto taxes from massive 45% to 19%
Regulators worldwide put cryptocurrencies under the taxation umbrella even if it isn’t recognized by the country. When it comes to cryptocurrency taxation rates, there are different rates in different countries.
The Conseil d’État i.e. French Council of State said on April 26 that the gains generated by the cryptocurrencies are considered capital gains. Prior to changing the rates, France has extremely high rates that could go up to 45 percent which also includes the 17.2 percent of generalized social contribution (CSG).
A number of taxpayers went to the highest court of French to challenge the existing regime applicable to the transfer of bitcoin among other cryptocurrencies. Under this system, where unusual activity was involved, the gains from crypto sales are considered industrial and commercial profits while in case of unusual activities, they come under non-commercial profits.
Now, the Council of State has brought the sale of bitcoin under the category of capital gains of movable property. Movable property is basically the goods that can be moved which is subject to a flat rate of 19 percent taxation. Even after adding the CSG to this, it will be significantly lower than the normal tax rates.
The Conseil d’État also talks about the gains generated from bitcoin mining which will come under the BNC category that covers taxation on professional operations.
France working towards a properly regulated crypto space
Recently, it has been reported that US households owe about $25 billion in crypto taxation to the IRS. The reasons behind such a big amount are the number of taxations put on different transactions involving cryptocurrencies. From the sale on cryptocurrencies, crypto-to crypto exchanges to hard forks and even increase in the value of cryptos are taxable.
By having cryptocurrencies subject to capital gains under movable objects, France has made it easy for the cryptocurrency investors. Now, their crypto investments won’t be taxable multiple times, piling up to an enormous amount.
Though the Finance Minister of France, Bruno Le Maire has called for crypto regulations worldwide, he supports crypto sector as well as he asked for a definitive framework to reduce the risk of speculation, terrorism financing, and money laundering.
France has definitely taken a fair step that the regulators of other countries need to look up to and take assistance from.
Which countries do you think need to take a similar step as France for crypto taxes?