Cryptocurrency As ‘Movable Property’ In France
The Supreme French Administrative Court, the State Council, changed the classification of income from the cryptocurrency capital, which led to a reduction in the tax rate by more than half for the trade in digital assets.
Since 2014 to the present day, the cryptocurrency is classified as industrial and commercial profits (the French abbreviation BIC) or as non-commercial profits (NBC), resulting in a capital gains tax of 45% for high incomes in addition to the generalized social contribution (CGS) of 17 , 2 percent.
A series of French taxpayers disputed the categorization by the State Council and won, arising in a verdict that considerably decreases tax burdens for most French investors.
The State Council controlled that the sale of cryptocurrency “in principle belongs to the category of capital gains in movable property,” with some exceptions. ” Movable property “in France belongs to noticable and imperceptible assets, among them vehicles and jewelry, as well as to less physical subjects, such as patents and copyrights.
As is said in the official communication from the State Coincil – “certain circumstances specific to the transaction may imply that they fall under provisions relating to other categories of income.”
When investments are part of commercial or professional activities, isntead of private investments, they also go under the BIC classification and hold the original higher rate.
In the US, cryptocurrencies are classified as property or capital assets, such as stocks, bonds, real estate, or gold. Short-run capital incomes are taxable at the normal rate of income tax in the US, and long-run profit is taxed at a reduced rate ranging from 15 percent to 23.9 percent. High earnings in the US are subject to a profit tax of 32 to 37 percent.
France basically supports cryptocurrencies and forced them to be on the agenda at the last meeting of the G20. French Finance Minister Bruno Le Mair hopes that the country will take the initiative in regulation and become a “hotbed” for blocking innovation.
For French cryptocurrency investors and supporters of detachment, this positive news can stimulate activity in the sector.
