Understanding Bitcoin Taxation in France
Reporting Bitcoin gains in France is mandatory under French tax law. Whether you’re trading cryptocurrencies, receiving them as payment, or earning through mining, the French Tax Administration (Direction Générale des Finances Publiques – DGFiP) considers these activities taxable events. Since 2019, France treats cryptocurrency gains under the capital gains tax regime, with specific rules distinguishing between occasional trading and professional activity. Failure to report can result in penalties of up to 80% of owed taxes plus interest, making compliance essential for all crypto holders.
How Bitcoin Gains Are Taxed in France
French crypto taxation hinges on two key factors:
- Frequency of Trading: Occasional traders pay a flat 30% tax (12.8% income tax + 17.2% social charges). Professional traders pay progressive income tax (up to 45%) plus social charges.
- Gain Calculation: Taxable gain = Sale price – (Purchase cost + associated fees). Losses can be carried forward for 10 years.
Important thresholds: Gains under €305 per year are tax-exempt. For non-fungible tokens (NFTs) and DeFi activities, standard crypto tax rules apply.
Step-by-Step Guide to Reporting Bitcoin Gains
1. Calculate Your Annual Gains
Track every transaction using:
– Acquisition date and value (in EUR)
– Disposal date and value
– Associated fees (exchange commissions, network fees)
2. Complete Tax Form 2086
Attach this supplementary form to your annual income tax return:
– Box 3AN: Total capital gains
– Box 3BN: Total capital losses
– Box 3TS: Social contributions
3. File Through impots.gouv.fr
Log into your personal tax portal during the declaration period (typically April-June). Electronically submit Form 2086 alongside your main tax return.
4. Pay Taxes Due
Tax payments are due upon receipt of your avis d’imposition (tax notice). Late payments incur 10% penalties.
Common Reporting Mistakes to Avoid
- Ignoring small transactions: Even minor trades must be recorded.
- Miscalculating cost basis: Use FIFO (First-In-First-Out) method as required by French law.
- Forgetting foreign exchanges: Gains from international platforms are still taxable in France.
- Overlooking airdrops/staking: These count as taxable income at market value upon receipt.
Frequently Asked Questions (FAQ)
Q: Do I need to report if I only hold Bitcoin?
A: No. Taxation triggers only upon selling, trading, or spending cryptocurrency.
Q: How are crypto-to-crypto trades taxed?
A: Each trade is a taxable event. Calculate gains in EUR equivalent at transaction time.
Q: What records must I keep?
A: Maintain transaction histories, wallet addresses, and exchange statements for 6 years.
Q: Are there tax benefits for long-term holdings?
A: No. France doesn’t offer reduced rates for long-term crypto investments.
Q: Can I deduct crypto losses?
A: Yes, capital losses offset gains in the same year or future years (up to 10 years).
Disclaimer: Tax regulations evolve. Consult a French tax advisor for personalized guidance. This article reflects rules applicable as of 2023.
