For several years now, a tax regime has been developed to regulate crypto operations carried out on French territory. This year the system has been updated, with new provisions coming into effect. To better position yourself in this direction, here are the 5 things you absolutely need to know about the taxes imposed on cryptocurrency operations in 2024.
1. The tax rate on cryptocurrencies in 2024
In 2024, the tax rate on cryptocurrency transactions is 30% in France (Single flat-rate deduction). This percentage is applied in particular to the total amount of capital gains obtained after subtracting capital losses from the amount including all capital gains realized at the end of the fiscal year.
It is precisely made up of the rate applied on income tax (12.8%) and rate planned for social security contributions (17.2%). As revealed in article 150 VH bis of the general tax code, the overall capital gain realized during the year is not taxable when the overall sales recorded are less than €305.
In this case, you will simply have to declare all your crypto transactions carried out over the period. No tax will be levied in this way. On the other hand, when sales exceed the threshold of 305 euros, you will indeed be taxed. That said, it should be noted that an interesting new addition has been made for the case of individuals.
In fact, they have the possibility of paying the tax in another way thanks to the progressive income tax scale. As the name suggests, this new system should allow you to fulfill your tax responsibilities in installments.
Since 1er January 2023taxpayers with professional status must declare themselves in the category of Non-commercial profits (BNC). This regime replaces that of Industrial and commercial profits (BIC) which was in force until 2022.
2. Conditions for taxing income on cryptocurrencies
You should also keep in mind that not all crypto transactions can be taxed in France. For example, a transaction in cryptocurrencies carried out towards another crypto currency is not a taxable transaction according to the tax law in force in France.
However, when you use cryptocurrencies in your possession to acquire or purchase something other than cryptocurrencies, you will be subject to cryptocurrency tax. In the majority of cases, this may involve the sale of cryptocurrencies to fiats (Dollar, euro, pound sterling, etc.).
It may also be a matter of purchasing a material good or service with crypto currencies, or vice versa.
In these cases, you must declare the transactions in question and calculate whether you have made a capital gain or a capital loss. This is to know if you have reached the threshold set to be exposed to taxation. For information, the calculation of capital gains is done according to a very precise formula.
Formula
It looks like this:
Transfer price – (Total net acquisition price x Transfer price / Overall value of the portfolio before the sale).
In preparation for this calculation, you should always know the fiat currency value of each amount invested in cryptocurrencies. The same applies to all cryptocurrencies that you hold at the time of each sale. This estimate also takes into account cryptos staked or left on an exchange or wallet.
3. Crypto operations and their tax coverage in France
The tax provisions applied to cryptocurrencies specifically support each type of crypto transaction. In other words, for each type of cryptographic activity carried out, you must remember the conditions for collecting taxes. Here is a summary of the main operations in question:
- THE mining : the capital gains made for your cryptocurrency mining operations are affiliated to the non-commercial profits regime (BNC). The amount of fiat to be reported here should be equal to the cryptocurrency rewards obtained from mining;
- Staking : the collection conditions applied for staking operations are identical to those for mining. The regime taken into account here is that of BNCs and the gains generated must be declared through their equivalent amount in fiat;
- Play to earn : regarding play to earn winnings, tax provisions differ from one person to another. If you are a professional, the BNC regime will be applied to you. On the other hand, if you are an individual, you will be subject to the tax regime applied for this type of taxpayer;
- Airdrops : the airdrop system takes into account two possibilities. When you benefit from a unanticipated airdrop, you should not normally expect to pay taxes. In the case of an early airdrop, the tax imposed on the BNC may be applied;
- Cryptocurrency donations : if you offer cryptocurrencies, no tax will be applied to you. If it is you who obtains the donations, the tax will be applied when you realize a capital gain with the cryptos obtained.
Taxation of NFTs
The provisions relating to non-fungible tokens (NFT) are not yet precise in France. They can be declared as a digital asset, but also as a work of art with a sales tax at a rate of 6.5% or a capital gains tax at a rate of 36.2%.
4. Dates to know for declaring cryptos for taxes in 2024
In France, the tax declaration is done both online or in person. In-person declarations will be received until the date of May 20, 2024. Regarding online declarations, they are already supported on the tax administration website from April 11. Closing dates differ depending on the department. The distribution is as follows:
- Departments 01 to 19 : May 23, 2024
- Departments 20 to 54 : May 30, 2024
- Departments 54 to 976 : June 6, 2024
To this end, you should know that it is obligatory to declare your accounts held abroad, particularly on exchange platforms not located in France. It’s the form 3916-bis which is specially dedicated to this task. Also keep in mind that it is necessary for you to declare all your transactions that meet the tax conditions presented in this article.
5. Possible sanctions for non-declaration of your crypto transactions
Finally, you must always take care to declare all your crypto transactions in accordance with the provisions of tax law in France. If you deliberately choose to omit a transaction, the tax authorities will take action to this effect.
You incur up to 10,000 euros fine in the event that the country in which you opened accounts has not signed an administrative agreement with France.
Not only will you have to provide explanations, but you will also have to expect a fine or sanctions for fraudulent practices. It is also possible that a tax adjustment will be applied, with the effect of 80% increase in initial tax amount.
That said, through the Law of August 10, 2018, the tax administration allows an irregularity observed in the declaration to be corrected. In this case, no increase will be applied. Late payment interest may, however, be imposed.
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