France Dismisses Slew of Crypto-Related Tax Amendments

By Swati Kishore

On Monday, December 17, 2018, the National Assembly of France dismissed tax amendments that were slated to lower cryptocurrency-related taxes. The rejected tax amendments were designed for the benefit of crypto users, and are related to crypto tax exemptions, as well as capital losses and gains.

One of the tax amendment proposals that was dismissed during Monday’s meeting was aimed at increasing the yearly tax exemptions from USD 347 to as much as USD 3000 to USD 5000. The National Assembly stated that it believes that the tax exemption of 305 euros is already amiable for crypto users. Further, the assembly said that increasing the annual tax exemption to USD 5000 will be excessive.

The second amendment that did not go through was the one that was slated to facilitate the taxation of capital gains under the same conditions and on the same basis as securities. Thirdly, the amendment that differentiated between normal crypto activities from the occasional ones (which would subsequently result in favorable taxation for crypto traders) was also dismissed. The proposal on crypto-based capital losses was also turned down. Another tax amendment that received dismissal from the National Assembly was highlighted in the Article 16a. Instead of taxing cryptocurrencies based on the conversion into fiat, the amendment had proposed to only tax profits on crypto when they are withdrawn to the bank or sold off.

Interestingly, while most of the amendments witnessed dismissal from the Assembly on Monday, however, the proposed 30 percent flat tax for digital currency transactions was not considered at the meeting. Hence, the aforementioned amendment is still a part of Article 16 Bis. As per the discussion during the National Assembly meeting, it was decided that a flat tax rate is favorable since it provides legal certainty. It is worthy to note that presently cryptocurrencies are taxed at the rate of 36.2 percent. Out of this 17.2 percent is social contribution while the other 19 percent is income tax.