French Taxpayers Report $442M Crypto Profits

Cryptocurrency trading has become a hot topic in France, with taxpayers disclosing approximately $442 million in profits in the latest fiscal year. This figure, released by the French tax authority, has been acknowledged as “significant” by Le Figaro, the French newspaper. However, the figures are “10 times lower than the estimates of the gains made in 2021,” indicating that a majority of cryptocurrency holders may be evading taxes.

Overview of Cryptocurrency Trading in France

Cryptocurrency trading has become increasingly popular in France, with one in ten French people owning cryptocurrencies. This percentage represents an increase of about 10% since a similar survey was conducted in 2022. Additionally, 85% of the respondents claimed to know crypto assets, indicating a growing awareness of cryptocurrencies in the country.

Taxation on Cryptocurrency Trading in France

According to the tax law in France, a “flat rate” tax of 30% is imposed on profits obtained from cryptocurrency trading. This tax was initiated in 2019. The tax authority stated that approximately “20,000 tax households” declared gains from cryptocurrency trading for the fiscal year 2021. The newspaper cited that the tax authority did not reveal the proportion of the amount that was taxed. Nevertheless, according to the law, 30% of the profits would have gone directly to the state coffers.

Capital Gains Tax on Crypto-to-Fiat Trades

The law also states that capital gains tax is only imposed on crypto-to-fiat trades, and crypto-to-crypto trades do not require declaration. However, prolific traders are subject to different taxation laws. Individuals who regularly receive profitable crypto payments may be obligated to pay taxes as if they were earning industrial and commercial profits.

Decline in Cryptocurrency Prices

The French media outlet explained that the amount declared was lower than the capital gains estimated during the year, mainly due to the decline in cryptocurrency prices. Recent survey data also revealed that one in ten French people own cryptocurrencies, and 85% of the respondents claimed to have knowledge about crypto assets. This percentage represents an increase of about 10% since a similar survey was conducted in 2022.

Discrepancies in Reported Figures

The amount declared by French taxpayers was lower than the capital gains estimated during the year, mainly due to the decline in cryptocurrency prices. According to Le Figaro, the French newspaper, the figures reported by the tax authority were significant but still ten times lower than the estimates of gains made in 2021. The Chainalysis report contradicts the claims of the tax authority and suggests that cryptocurrency profits in France were more than $4 billion in 2021, indicating that a majority of cryptocurrency holders may be evading taxes.

Conclusion

The latest figures from the French tax authority reveal that French taxpayers have disclosed approximately $442 million worth of profits from trading cryptocurrencies in the latest fiscal year. However, a Chainalysis report contradicts these claims, suggesting that the profits from trading cryptocurrencies in France were more than $4 billion in 2021. The difference between the two figures indicates that a majority of cryptocurrency holders may be evading taxes.

FAQs

  1. What is the tax rate on cryptocurrency profits in France?
  • The tax rate on cryptocurrency profits in France is a “flat rate” tax of 30%.
  1. How many tax households declared gains from cryptocurrency trading for the fiscal year 2021 in France?
  • Approximately “20,000 tax households” declared gains from cryptocurrency trading for the fiscal year 2021 in France.
  1. What is the capital gains tax on cryptocurrency trading in France?
  • The capital gains tax on cryptocurrency trading in France is only imposed on crypto-to-fiat trades, and crypto-to-crypto trades do not require declaration.
  1. Why was the amount declared lower than the capital gains estimated during the year in France?
  • The amount declared was lower than the capital gains estimated during the year in France mainly due to the decline in cryptocurrency prices.
  1. How many French people own cryptocurrencies, according to recent survey data?
  • Recent survey data revealed that one in ten French people own cryptocurrencies, representing an increase of about 10% since a similar survey was conducted in 2022.

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