France is getting ready to shake things up with a new tax on cryptocurrency in 2025. This isn’t just any tax; it’s part of a broader plan to replace the existing wealth tax with one targeting “unproductive assets.”
Targeting “Unproductive” Assets
Think of it as a tax on things that aren’t generating income, like luxury goods, unused property, and now, cryptocurrencies like Bitcoin. Senator Sylvie Vermeillet spearheaded this change, arguing that it’s unfair to tax other assets while leaving crypto untouched. The goal? A more “balanced” tax system.
How it Works
The proposed tax affects assets exceeding €800,000. This means even unrealized
gains (profit you haven’t actually cashed in yet) on your crypto will be taxed. Currently, France taxes crypto profits above €305 at a flat 30%, but this new proposal changes the game.
However, there’s a loophole: crypto-to-crypto trades (swapping one cryptocurrency for another) remain tax-free. This is intended to encourage diversification within the crypto market.
Reporting Requirements and Penalties
This new tax isn’t just about paying up; it also involves reporting. French citizens must declare any foreign crypto accounts. Failure to do so results in a hefty fine: €750 for unreported accounts, jumping to €1,500 for accounts holding over €50,000. You’ll also need to fill out the Cerfa 3916-bis form annually, even if you haven’t made any trades.
Potential Impacts
While supporters believe this will create a fairer system and boost crypto market participation, critics worry it might dampen investor interest and cause price volatility. The proposal has passed a preliminary vote in the Senate, but it’s not yet final law. So, crypto holders in France should keep a close eye on developments.
