- Taxes on gains from cryptocurrencies transactions has been reduced to a flat 19% rate from the previous high rates that went up to 45%.
- Profits made from cryptocurrencies will now be seen as capital gains of movable property.
- François Villeroy de Galhau, the French Central Bank is stating that there is a necessity to promote a connection between traditional banking and the cryptocurrency world.
If you are living in France, and have made some profit by trading in cryptocurrencies, then now you be subjected to a tax rate of 19% which is a huge drop in consideration to the previous high rates of 45%. The Council of State declared this decision on April 26 as they stated that the gains generated from digital currencies should be considered as capital gains of “movable property,” opposed to industrial and commercial profits - which was the case prior. However, it is still worth noting that in the presence of other social contribution taxes, a person might ultimately be liable to pay something around 36.2% in taxes.
However, this positive news for crypto-enthusiasts is also served with a little caveat as the Council of States has also implied that under “certain circumstances” in crypto-transactions ‘may imply that they fall under provisions relating to other categories of income.’ These certain circumstances include the likes of crypto-mining operations, regardless of its scale, and these will be taxed at the previous 45% rate.
A few days before this announcement, François Villeroy de Galhau, the French Central Bank also remarked that there needs to be “internationally harmonized answers” for dealing with the crypto-market, as there needs to be a highlighted importance of fostering a connection between the traditional banking world and the cryptocurrency ecosystem.
Galhau states, “In particular, we should work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy.”
It was back in February that Galhau along with French finance minister Bruno Le Maire and other German counterparts came together and authored a letter to G20 and for consulting on cryptocurrency issues. The officials requested for an International Monetary Fund report to understand the financial stability of digital currencies and their potential implications.
Here is a short excerpt from their letter: “We believe there may be new opportunities arising from the tokens and the technologies behind them. […] However, tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures. In the longer run, potential risks in the field of financial stability may emerge as well.”