France — crypto tax & ICO regulations 🇫🇷

TAKING A CLOSE LOOK ON CRYPTO REGULATIONS IN FRANCE

Crypto taxation in France

The tax rate on Bitcoin in France was reduced to 19% in April 2018, following a new classification of Bitcoin. Cryptocurrency sales are considered as capital gains of “movable property”. This means that private, non-commercial users are subject to income tax at a rate of 19%. In order for the 19% flat tax rate to be applicable, it has to be requested as soon as the capital gain is realised. Exemptions for this include for example transactions from cryptocurrency mining, which are taxed at the BIC (industrial and commercial profits) rate of 45%. Losses from cryptocurrencies can be carried forward and can be deducted from capital gains of the same nature in the same year of carried forward and set off against profits for 6 years. The tax year ends with 31 December. Tax returns have to be filed until 1 March but extended deadlines exist for online filing.

ICO regulations in France

There is no specific legal framework for ICOs in France, the AMF (autorité des marchés financiers) however issued a public consultation document summarizing opinions and statements of experts, research institutes, companies, individuals and many more. The report defines a set of guidelines for ICOs which, when followed, will obtain a visa by the AMF in the near future. The visa system enables legitimate ICOs to run more smoothly, making it for example easier to set up a bank account.

French banks on cryptocurrencies

La Banque de France, the french central bank, states cryptocurrencies to be a dangerous speculative asset. In an article from March 2018 the institution explains what issues and risks virtual currencies pose for investors and the financial market, hence portraying Bitcoin and Co. with a focus on its negative aspects due to market volatility and the uprise of ICOs. As a resumee the bank mentions that it’s necessary to find a solution concerning regulations on an international level as the technology is linked to the Internet and therefore not bound to national borders. In general, most banks in France have not yet issued an official statement and stay alert and sceptical. They are missing a legal framework that would be a first step towards building trust in virtual currencies.

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