France is to tax gains from cryptocurrency sales as capital gains of “movable property.” The country has moved to reduce the rates from up to 45% to a flat 19%. Earlier this year, the High Administrative Court of France was seized on behalf of several taxpayers, challenging the instituted regimen, in force since July 2014, related to taxation of bitcoin and other cryptocurrency-related transactions. The Council of State also communicated that there would be “certain circumstances specific to the transaction of crypto assets which may imply that they fall under provisions relating to other categories of income”. In other words, if the capital gains have resulted from activities other than cryptocurrency-related sales but “bitcoin mining”, for example, they would fall under the category of commercial and industrial profits under the previous regimen, irrespective of whether or not the activity was occasional. Hence, these profits will be taxed at the higher rate of 45%.
Late last year, the head of AMF (France’s stock market regulator Authorité des Marchés Financiers) expressed his positivity towards the crypto field, stating that it could fulfill a legitimate business need. However, the country’s overall attitude has changed multiple times over the course of the last few months. We saw the Governor of the Bank of France calling for a higher emphasis on crypto exchanges.
Source: http://bitcoinist.com/france-slashes-cryptocurrency-taxes/On April the 26th, the Conseil d’Etat stated that the profits generated by cryptocurrencies should be considered as capital gains. Hat means that the new regime will tax cryptocurrency profits with a flat rate of 19%, significantly lower than the previous 45%. However, including other social taxes, the amount will be higher, reaching 34,5%.
France Reduces Bitcoin Taxes
Different countries from all over the world are regulating cryptocurrencies and taxing gains on the profits investors make. But some times, the taxes paid over the profits are extremely high, like in the case of France. The tax rate could go up to 45%. France is one of the most important countries in the European Union. This decision may be very important to leave a precedent in taxing Bitcoin and cryptocurrencies. Other countries may follow France’s decision to reduce the taxes applied to gains related to trading virtual currencies. Burno Le Maire, the French Finance Minister, called for worldwide crypto regulations in the past, but he also expressed his support for the crypto-space.
Mr Le Maire explained:
“These new financial technologies bring promises but, at the same time, they bring risks: terrorism financing, money laundering activities and speculation. That’s why we must define a framework in which these new technologies could develop in a safe way for countries and nations.”
At the same time, during the G-20 Financial summit that took place in Buenos Aires the last March, he said that France has interest to become one of the first major financial centres in the world to propose an ad hoc legislative framework for companies making Initial Coin Offerings.
It is clear that France knows what it is doing. The authorities are trying to remain competitive in a market that is very active. Germany is also taking further steps in order to attract crypto investments. For example, the German Finance Minister, explained that individuals that will use virtual currencies as a means of payment will not have to pay taxes on them. Moreover, a new cryptocurrency exchange for wealthy investors has been opened in German territory, allowing important individuals and enterprises invest safely in cryptocurrencies within a regulated exchange.
Source: https://usethebitcoin.com/france-changes-tax-laws-on-bitcoin-from-45-to-19-on-capital-gains/Well, i think that one of the more significant findings to emerge from France's reaction is that it could lead to the wave of tax reduction in Europe. These actions contribute in several ways to our understanding of continued competition among European countries in attracting cryptocurrency investments in the time to come and provide a basis for other countries to follow, such as: America, China, Korea etc.
Now, the question is: who will follow France? I would like to have your thought.
