Hi there 👋
The 2019 Finance Law has introduced a specific tax regime for cryptocurrencies and has established the implementation of the Prélèvement Forfaitaire Unique (PFU) also known as Flat Tax. Here are the main features of this law:
Trades between digital assets are neutralized. Thus, crypto-crypto (or inter-crypto) trades are not subject to tax in 2019. Nevertheless, this exemption only concerns crypto asset transfer transactions for individuals and those with occasional activity. For your information, these transactions were taxable in 2018 under the capital gains tax regime on movable property.
The taxable event is the conversion of cryptocurrencies into a FIAT (state monetary currency, i.e. a currency with legal tender status) or the sale of crypto-assets against a product or service. Therefore, there is no taxation in the case of conversion of cryptocurrency to stablecoin. In other words, the conversion of cryptocurrencies (digital assets in the text of the law) against euro is taxable.
Exemption if the annual amount of sales is less than 305 euros. Beware, this exemption does not exempt the taxpayer from declaring his capital gains in crypto-assets. He must still calculate and declare his capital gains in cryptocurrencies and his foreign accounts, or risk being fined.
Capital Loss Carry-Over - Net capital losses cannot be carried over to future years under the casualty tax system.
In case of net capital gains for a private individual with an occasional activity, these are taxable under the flat tax (or Prélèvement Forfaitaire Unique, PFU). The principle is to adapt a single rate to capital income. Thus, cryptocurrencies are taxed in the same way as capital (life insurance, shares, interest, capital gains from the sale of securities...). The single rate is 30%. It results from the addition of two rates, 17.2% of social security levies and 12.8% of income tax.
Reporting Formality - Transfers made during the course of year N do not have to be reported as they occur, but only at the time of the N+1 income tax return campaign.
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The Waltio team