As more countries around the world are adopting cryptocurrencies, France has established their own rules to regulate and tax these digital assets. While these rules offer clarity for businesses and individuals in France, it is important to understand France’s crypto tax policy in detail for compliance. Let’s delve deeper into crypto taxes in France.
Do You Need to Pay Crypto Taxes in France?
Yes, you have to pay taxes on cryptocurrency in France. The French tax authority, Direction Générale des Finances Publiques (DGFiP), looks at cryptocurrency as a “movable asset”. In simpler words, if you make any profit from selling or disposing of cryptocurrency, it is taxable. Moreover, you earn from mining activities, these earnings are looked at as non-commercial profits and are subject to income tax.
How Much Tax Do You Have to Pay on Cryptocurrency in France?
Three factors determine the amount of tax you’ll pay on your crypto:
- Your transactions
- How you are viewed as an investor
- Your annual income
If you are an occasional trader, you’ll be liable to pay 30 percent Prélèvement Forfaitaire Unique (PFU) taxes on gains from crypto sales or as non-commercial profits Bénéfices Non Commerciau (BNC).
If you are a professional trader, you are subjected to pay 45 percent under the new guidance formerly known as BIC (Bénéfices Industriels et Commerciaux) tax. Whereas for crypto mining, the miner has to pay income tax up to 45 percent because mining rewards are viewed as non-commercial profit. Furthermore, there is a micro-BNC tax treatment if you are running a small mining operations and your turnover is less than €77,700 for 2023.
| On a Side Note: Prélèvement Forfaitaire Unique (PFU) is referred to as “flat tax” in France while Bénéfices Non Commerciaux (BNC) refers to profits derived from non-commercial professional activities. |
How is Crypto Tax Calculated in France?
As we’ve mentioned before, in France, cryptocurrencies are classified as “movable property” excluding crypto mining rewards. Additionally, your tax obligations depend on whether you are an occasional or a professional trader. As per 2023 regulations, the majority of investors will be deemed occasional traders. However, we will explain the nuances of both occasional as well as professional traders.
Occasional Traders
If you are categorized as an occasional trader, you are liable to pay 30% PFU. This tax rate applies to financial investments such as cryptocurrencies, dividends, and securities.
Since it is a flat tax, your total annual income doesn’t affect the tax rate. The 30 percent PFU includes 12.8 Income Tax and 17.2 percent social security contribution. Furthermore, if you are a high-income earner, you might have to pay an additional exceptional income tax rate of 4 percent.
But that’s not it.
According to the new rules, you have the option to forgo the 12.8 percent while filing your annual tax return in favor of a progressive tax rate on your capital gains. Low earners who are not liable to pay income tax (under €10,777 for single taxpayers) could only pay their 17.2 percent social security contribution.
On the other hand, taxpayers in the 11 percent tax bracket (€10,778 to €27,478 for single taxpayers) have the facility to reduce their tax rate to 27. 45 percent. To avail of this option, you can tick the box 20P on Formulaire N°2042 when filing. Additionally, of the 9.2% CSG (generalized social contribution), 6.8% is deductible for investment income, including cryptocurrency gains.
Professional Traders
Before new guidance took place in January 2023, gains made through trading were taxed as commercial profits or BIC. Under new guidance, the majority of new traders are categorized as professional, and for professional traders, gains are classified as non-commercial profits or BNC.
The BNC tax system is applicable to self-employed individuals involved in non-commercial activities, including professional traders. BNC profits are still subject to the same Income Tax rates and are taxed on net profits. They are calculated by subtracting expenses from gross income.
In 2023, if you are an investor whose turnover was less than €77,700, the micro-BNC scheme allows a 34 percent tax credit on turnover. This means that you have a progressive tax rate between 0 to 45 percent on only 66 percent of your income based on your total revenue.
The differences between occasional and professional traders can significantly affect your tax obligations, so let’s explore these distinctions further.
So, How Does the DGFiP Classify You?
In the past, it all depended on how often you traded. However, new rules that started in January 2023 have changed things, so let’s look at both situations.
- Occasional Traders: Previously, if you traded cryptocurrencies infrequently or held them long-term, you were considered an occasional trader. This meant you paid a flat tax rate of 30% (PFU) on your gains.
- Professional Traders: If you traded cryptocurrencies frequently or with high volumes, you might have been classified as a professional trader, subject to a progressive commercial profit tax rate (BIC) ranging from 0% to 45%.
The DGFiP made these determinations based on individual circumstances, considering factors like how much you invested, your total trading volume, and how often you sold your crypto.
- New Guidance (January 2023): The rules changed, and now the frequency of trading no longer determines your classification. Most investors selling crypto as part of managing their private assets will fall under the 30% flat tax rate (PFU). Only those engaging in professional-like trading (frequent, sophisticated transactions) will be classified as professional traders and taxed on their gains as non-commercial profits (BNC).
Income Tax Rates in France
Occasional traders can choose to pay the progressive Income Tax rates instead of the flat PFU tax on their gains. For professional traders and crypto mining rewards, the BNC tax regime also follows the Income Tax rates. For the 2023 financial year, which you will report on in 2024, the rates are as follows:
| Income Bracket | Tax Rate |
| Up to €10,777 | 0% |
| From €10,778 to €27,478 | 11% |
| From €27,479 to €78,570 | 30% |
| From €78,571 to €168,994 | 41% |
| More than €168,994 | 45% |
As you can see, if you’re in the 11% tax bracket, you can lower your tax on crypto to 27.45% by choosing not to pay the 12.8% tax (not counting the CSG).
Another important point is the micro-BNC tax regime, which many investors can use, including crypto miners and professional traders, as long as they earn less than €77,700 in a year (for 2023). Although the micro-BNC tax regime can be a bit complicated, it basically means that you can deduct 34% from your total income before calculating your taxes. So, only 66% of your income will be taxed based on the income tax rates mentioned earlier. For those using the BNC tax regime, calculating income is different from how occasional traders calculate their profits. Here are the differences.
How to Calculate Crypto Gains and Losses in France?
To calculate how much tax you owe to DGFip in France, you should know your gains and losses. First, you have to know your cost basis which is the cost of acquiring an asset along with any allowable fees such as a purchase fee.
After determining the cost basis, subtract it from the sale price of the asset to find out the gain or loss. If you have made a gain, this will be deemed as a capital gain subject to 30 percent PFU. It can be less if you decide to waive the 12.8 percent.
If you have a loss, it will be deemed as a capital loss. While it may look bad, a loss can be profitable as it can help you offset your capital losses against your capital gains. This reduces your net gains which in turn reduces your tax liability. However, the DGFiP keeps a close eye on this. You can only use the capital losses to offset the gains from the same financial year, unlike other jurisdictions where they carry forward the crypto losses to the next year.
Cost Basis Method
The PVCT method is used in France to calculate the cost basis when selling a portion of your cryptocurrency holdings.
Let’s break this down with an example:
You own 3 Ethereum (ETH), each bought at different prices:
- 1 ETH bought for €1,000
- 1 ETH bought for €1,200
- 1 ETH bought for €1,500
So, your total acquisition cost (the total you paid for these 3 ETH) is:
- €1,000 + €1,200 + €1,500 = €3,700
Now, let’s say you sell 1 ETH for €2,000. This is your sale price.
The total portfolio value (the total value of all your crypto holdings, including the ETH you’re selling) is:
- 3 ETH at current value (€2,000 each) = €6,000
Now, using the PVCT formula, you calculate the cost basis for your sale:
Formula:
Sale price – (total acquisition costs x [sale price/total portfolio value])
Let’s plug the numbers into the formula:
1. Sale price = €2,000
2. Total acquisition cost = €3,700
3. Total portfolio value = €6,000
Step 1: Divide the sale price by the total portfolio value:
– €2,000 / €6,000 = 0.333
Step 2: Multiply the total acquisition cost by this fraction:
– €3,700 x 0.333 = €1,232.10
Step 3: Subtract this from the sale price to get your cost basis:
– €2,000 – €1,232.10 = €767.90
Result:
Your gain from selling 1 ETH would be €767.90.
When Should You Report Crypto Taxes in France?
In France, the tax year runs from 1st January to 31st December and you have to report your taxes during this period. Here are some key days and deadlines you should know about:
| Declaration Type | Tax Return Deadline |
| Paper Declaration | May 22, 2024 |
| Departments 1 – 19 (including non-residents) | May 25, 2024 |
| Departments 20 – 54 | June 1, 2024 |
| Departments 55 – 974/976 | June 8, 2024 |
How to Report Crypto Taxes in France?
The simplest way to report your crypto taxes in France is online with a FranceConnect account. As a matter of fact, it is compulsory to report taxes online unless you cannot do it. In such cases, only you have to submit a paper declaration. These are the forms used to report your crypto taxes to the DGFiP:
- Formulaire 2042: The primary tax return form where you declare all your income. All taxpayers are required to file this, either individually or jointly if married.
- Formulaire 2086: Attached to Form 2042, this form is used to report capital gains and transactions, including any profits or losses from selling crypto for fiat currency.
- Formulaire 2042 C: Used to declare mining income or any other income categorized as BNC (non-commercial profits).
- Formulaire 3916-bis: For declaring any cryptocurrency accounts that you have opened outside of France.
Calculate and File Your Crypto Taxes with ZenLedger
Now that we’ve discussed taxes, calculation methods, and tax forms, let’s explore how to report your crypto taxes in France using ZenLedger:
Step 1: Sign up with ZenLedger
Step 2: Choose France as your base country and choose (EUR) as your currency
Step 3: Connect all your exchanges and wallets with ZenLedger and we will automatically calculate cost basis, fair market value, and gains/losses for your transaction history.
Step 4: Review your transactions
Step 5: Download your reports and file your taxes
Final Thoughts
France has clear tax regulations for cryptocurrency, requiring taxes on profits from sales, mining, and trading. Whether you’re an occasional or professional trader, understanding your classification and how taxes are calculated is key to compliance. Using tools like ZenLedger can simplify the process, ensuring accurate reporting and minimizing tax liabilities.