➡️ The 2019 Loi Pacte has introduced a specific taxation regime for cryptocurrencies. Let's take a closer look at this law...
As owners of digital assets, you have two tax obligations: the declaration of digital asset accounts held abroad (Cerfa 3916bis) and the declaration of taxable transfers (Cerfa 2086).
Declaration of digital asset accounts held abroad (Cerfa 3916bis)
Under French law, all accounts opened, used, or closed during 2023 must be declared. Thus, an account opened after January 1, 2024, is excluded from the scope of the law, for the 2023 tax return campaign. However, it will have to be declared next year.
Legally, the obligation to declare a digital asset account held, opened, closed, and used abroad during the relevant tax year applies to custodial accounts. This means that only exchange platforms that own your funds need to be declared (Binance, Coinbase... for example). If you hold the private key for access to your account, as on a Ledger, you don't need to declare them on form 3916-bis, as these accounts are considered non-custodial.
Declaration of taxable sales (Cerfa 2086).
A taxable transaction is the conversion of crypto-currencies into a FIAT (state monetary currency, i.e. a currency with legal tender and legal tender status) or the sale of crypto-assets against a product or service. In other words, converting cryptocurrencies (digital assets in the text of the law) into euros is taxable.
❗️ The obligation to declare taxable transactions should not be construed as an obligation to declare capital gains.
The fact that you have a capital gain or loss on a taxable transaction is irrelevant: you must declare the transaction. The calculation of the capital gain or loss comes next.
If you have a capital gain, you will be liable for the 30% flat-tax on the amount of the capital gain;
If you have a capital loss: you won't have to pay any tax.
❗️Vous must therefore declare your transactions for tax purposes even if you have capital losses.
Exchange transactions between digital assets are not taxable transactions.
By law, crypto-crypto exchange transactions are tax-neutral. A transaction involving the sale of a cryptocurrency for a stablecoin will therefore be a non-taxable transaction, not having to be declared. Nevertheless, this exemption only concerns crypto-asset sale transactions for individuals with an occasional business. For information, these transactions were taxable in 2018 under the capital gains tax regime for movable property.
Capital gains are taxed at 30% or at the progressive income tax rate.
Once the calculations have been made, if you have capital gains, these will be taxed under the flat tax (or Prélèvement Forfaitaire Unique, PFU).
This flat tax is 30%: this single rate results from the addition of two rates, 17.2% social security levies, and 12.8% income tax.
The Finance Act for 2022 now allows individuals to waive the 12.8% tax and subject their capital gains realized in cryptocurrencies to the progressive income tax scale.
If you are not taxable, you will only be subject to 17.2% social security contributions.
Technically, this option only applies to taxable transactions carried out in 2023! In other words, this option will only be available when you file your 2024 tax return for 2023 income.
Tax exemption for annual sales of less than €305.
If the annual amount of your taxable transactions is less than €305, then you are exempt from tax.
The capital gains tax exemption for annual sales of less than €305 should not be confused with a tax allowance.
Therefore, if your taxable sales exceed €305, you will be taxed on all capital gains, without benefiting from the €305 allowance.
For example, if your taxable sales total €306, you will be taxed on the full amount.
The 305 euros does not apply to the amount of your capital gain, but to the amount of your taxable disposals during the year. For example, you may have made a capital gain of 200 euros on disposals of 400 euros: you will therefore be taxable on this amount.
❗️ This exemption does not exempt the taxpayer from declaring taxable transactions. Even if you are tax-exempt, you still have to declare your transactions.
Deduction and carry-forward of capital losses.
If you have realized capital losses, these offset any capital gains you may have realized on other transactions during the tax year. If, after offsetting, you still have capital losses, they cannot be carried forward to future years.
If you have any questions about the specifics of cryptocurrency taxation, please don't hesitate to contact us at mg@capitalconseils.net.
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