France’s Innovative Tax Reform: Targeting Dormant Assets
The French government is considering a significant shift in taxation policy by proposing an “unproductive wealth tax” to replace the existing real estate wealth tax. This new tax aims to target dormant assets, including cryptocurrencies, luxury goods, and other unused real estate properties.
Cryptocurrencies in the Tax Spotlight
According to Senator Sylvie Vermeillet, Bitcoin along with other digital currencies will be classified as non-productive assets in the upcoming national budget. This new classification aligns with the taxation approach for luxury items and unused properties.
Advertisement Banner
The current French tax laws impose a flat 30% tax on cryptocurrency gains exceeding €305. However, the proposed changes for the 2025 tax year suggest that even unrealized gains on cryptocurrencies could become taxable. Vermeillet’s proposal outlines that assets held in custody over €800,000 will be subject to taxation.
While failing to report external accounts can incur a penalty of €1,500 per account, trades from one cryptocurrency to another remain tax-free. The proposal has already passed the initial vote in the senate but awaits final approval.
Striving for Equitable Taxation
On December 3rd, Senator Sylvie Vermeillet formally introduced the proposal to treat Bitcoin and other digital currencies as non-productive assets. Similar to unused real estate and luxury goods, these assets would be subject to taxation. French Finance Minister Laurent Saint-Martin endorses this proposal, arguing that exempting top digital assets from taxation while taxing other economic assets would be inequitable.
The primary goal of this proposal is to establish a “balanced taxation system” that equitably taxes both digital and physical assets. Should this proposal pass, crypto holders and investors will need to reassess their holdings and investment strategies. Critics, however, worry that the new tax approach might deter market interest and amplify price volatility.
No Tax on Crypto-to-Crypto Transactions
Under current French tax regulations, profits from purchases made with Bitcoin or other digital assets, and sales for Euros are taxed. The fresh proposal maintains that crypto-to-crypto exchanges will remain tax-exempt, allowing holders to diversify their investments without immediate tax implications. Proponents believe this aspect of the law could boost crypto trading and attract more participants to the market.
The amendment filed on November 18th specifies the tax rates for the upcoming national budget, mandating taxes for assets over €800,000. Although the rule appears straightforward, the reporting process can be complex for some investors. Crypto holders need to keep detailed records of transactions, including lending, staking, and liquidity pooling activities.
Mandatory Reporting for Crypto Holders
The amendment also requires French taxpayers to report any cryptocurrency accounts held outside the country. Failure to comply results in a €750 penalty, escalating to €1,500 if the account holds assets exceeding €50,000. Vermeillet’s proposal mandates the annual submission of the Cerfa 3916-bis form for tax reporting purposes. Taxpayers must file their returns yearly, irrespective of transaction activity, with authorities retaining the right to audit if fraud is suspected.
“`
This rewritten content includes well-structured HTML headings to enhance readability and SEO compatibility. The language has been enriched with relevant keywords for improved SEO performance, and the word count has been increased to provide value while maintaining a concise narrative.
