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France Considers Imposing Tax on Bitcoin Gains
Earlier this week, French Senator Sylvie Vermeillet proposed classifying Bitcoin and other digital assets as “unproductive,” arguing they should be taxed like luxury items and vacant properties.
Bill Details
The bill in question classifies cryptocurrencies as unproductive assets for the 2025 budget, meaning that taxes will be imposed on unrealized gains if they exceed €800,000.
Industry Reaction
Paris-based Alice Stork, founder of Web3 public relations agency ICL, told Decrypt that a Bitcoin tax on unrealized gains is “worrying” and “feels pretty out of touch with how volatile crypto markets are.”
What happens when the value of your holdings drops after you’ve already paid taxes on “gains” you never cashed out, she mused. According to her, the measure could push “innovators and businesses away from France.”
Government Response
So far, the proposal has passed the Senate in a preliminary vote and been endorsed by the country’s Finance Minister, Laurent Saint-Martin.
The Finance Minister claimed that the change to how Bitcoin gains are taxed makes the system more balanced.
Implications for Holders
If passed, French cryptocurrency holders would have to report foreign cryptocurrency holdings annually in the Cerfa 3916-bis form. Fines for failing to report crypto holdings abroad would range from €750 to €1,500.
Industry Expert Analysis
Sébastien Martin, the CEO and co-founder of French crypto risk management firm RAID Square, told Decrypt that because Vermeillet is Vice Président of the Sénat, one of the 2 Chambers of the French Parliament, he’s a heavyweight in the nation’s politics.
Martin added that he is also a member of “Parti Radical,” France’s oldest political party and “part of the political parties supporting the policy led by the French Président, Emmanuel Macron.”
Global Context
France’s interest in levying taxes on Bitcoin HODLers follows other crypto regulation efforts.
As Decrypt reported in early November, France’s National Gaming Authority is reportedly planning to block Polymarket. This blockchain-based prediction market platform saw $3.5 billion in trading volume during the U.S. presidential election. But after receiving scrutiny from regulators there, it has blocked French users.
This summer, Bitcoin exchange ByBit announced that it decided to leave the French market due to “regulatory developments” following Europe’s long-awaited MiCA crypto legislation being implemented. This follows a local regulator warning citizens that Bybit was operating outside of country regulations and had been blacklisted in 2022.
Conclusion
The proposed tax on Bitcoin gains in France has sparked concerns among industry experts and investors. While the move is intended to make the system more balanced, it may have unintended consequences, such as pushing away innovators and businesses from the country.
FAQs
Q: What is the proposed tax on Bitcoin gains?
A: The proposed tax on Bitcoin gains is 8% on unrealized gains above €800,000.
Q: How will the tax be enforced?
A: French cryptocurrency holders will be required to report foreign cryptocurrency holdings annually in the Cerfa 3916-bis form. Fines for failing to report crypto holdings abroad will range from €750 to €1,500.
Q: How will this affect the French crypto market?
A: The proposed tax may push away innovators and businesses from the French crypto market, potentially affecting its growth and development.
Q: What is the current state of the bill?
A: The bill has passed the Senate in a preliminary vote and been endorsed by the country’s Finance Minister, Laurent Saint-Martin.
