French Crypto Traders Might Benefit from Lower Tax
In France, taxes on capital gains from Bitcoin trading might be cut to 30% from the current rate at 36.2%, as per a new budget bill amendment.
The finance commission in the lower house of France’s parliament supported on Wednesday a budget amendment that envisions lower taxes on cryptocurrency-generated income, Reuters reports. If approved, the proposal will lead to a flat 30% tax for capital gains from Bitcoin trading, putting cryptocurrencies in the same basket as other non-property assets taxed at that rate.
The amendment will become law if the rest of parliament approves the final version of the national budget bill. Should it get the all-clear, the new tax will take effect in January 2019.
At the moment, Bitcoin profits in France are taxed at a rate of 36.2%, and a reduction to 30% would mean that the cryptocurrency is considered a non-real estate asset. Earlier, crypto-related taxes in the country reached 45%, but a government body called the Council of State concluded that such profits should be considered gains from movable property, which means lower taxes. However, the current rate applies to crypto trading only, and mining operations are taxed at the higher rate as non-commercial profits.
The budget bill amendment is proposed by Eric Woerth, chairman of the Finance Committee of the National Assembly (France’s lower chamber of the parliament). This is not his first attempt to support a crypto tax change. In October, Woerth pushed a similar amendment to the draft budget bill for 2019, but it was withdrawn due to lack of support. This time, the amendment has received backing, but the upper house of parliament will have the final say.
The new tax change has both supporters and opponents. If it becomes law, transactions between crypto assets (for example, Bitcoin to Ether or vice versa) would be exempt from tax.
France is relatively open to blockchain and cryptocurrency. In March of this year, finance minister Bruno Le Maire said the country had to take action to become a center for initial coin offerings (ICOs), which would help local startups streamline fundraising processes.