- December 4, 2024
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
The French government proposes replacing the real estate wealth tax with an “unproductive wealth tax” that targets dormant assets, including cryptocurrencies, luxury goods, and other unused real estate. According to Senator Sylvie Vermeillet, Bitcoin will be classified as a non-productive asset in next year’s national budget. Vermeillet’s proposal is similar to the taxation of luxury goods and unused real estate.
The French tax laws apply a flat 30% tax on cryptocurrency gains over €305. However, in the proposed tax law for 2025, even unrealized gains on crypto are subject to tax. Under Vermeillet’s proposal, assets in custody over €800,000 shall become taxable.
Failure to report an external account faces a €1,500 per account, but cryptocurrency-to-cryptocurrency trades are tax-free. The new tax proposal has already passed the senate’s preliminary vote, but the legislation is not yet final.
JUST IN:
France to tax #Bitcoin unrealised capital gains. pic.twitter.com/8zsehL05f4
— Bitcoin Archive (@BTC_Archive) December 3, 2024
French Gov’t Looking For ‘Balanced Taxation’
On December 3rd, French Senator Sylvie Vermeillet formally submitted a proposal to classify Bitcoin and cryptocurrencies as non-productive assets in next year’s budget. Like unused real estate and luxury goods, unproductive assets like Bitcoin and digital assets are subject to tax. French
Finance Minister Laurent Saint-Martin approves the proposal, saying exempting the top digital asset from taxation while taxing other economic assets is unfair.
The proposal aims to balance taxation between digital and physical assets, creating a “balanced taxation system.” Once approved, crypto holders and investors must reevaluate their holdings and future investments. However, the proposal has a few critics who say it may reduce market interest and increase price volatility.
No Tax On Crypto-To-Crypto Trades
French taxation laws impose taxes on profits gained from purchases made with BTC or other digital assets and sales of digital assets for Euro. Under the current proposal, there are no taxes on crypto-to-crypto trades, allowing investors and holders to diversify their holdings with tax obligations instantly. According to its proponents and supporters, the new tax law will benefit crypto trade and expand market participation.
The amendment filed on November 18th specifies the tax rates for next year’s national budget, with holders paying taxes for assets over €800,000. While the new rule may seem simple, the reporting process can be daunting for some. Crypto holders must track transactions like lending, staking, and liquidity pools.
Crypto Holders Must Report Or Face Fines
The submitted amendment also requires French taxpayers to report any crypto accounts outside the country. Failure to file a report is subject to a €750 penalty. And if the account holds more than €50,000 in assets, the penalty increases to €1,500.
Vermeillet’s proposal also requires holders to submit the Cerfa 3916-bis form annually for tax reporting purposes. Taxpayers must file their tax returns annually, even if no recorded transaction is involved. Authorities reserve the right to review individual tax records if the government suspects potential fraud.
Featured image from Alexander Spatari via Getty Images, chart from TradingView
