France Crypto Tax Guide 2023

Whether you're selling crypto, mining crypto, or more - the DGFiP (Direction Générale des Finances Publiques) wants a cut! Learn everything you need to know about crypto tax in France in our France Crypto Tax Guide for 2023 - including PFU tax on crypto, BIC tax on crypto, tax free crypto, how to file your crypto taxes with the impôt sur le revenu (IR) and more - all ahead of the tax return deadline!

Do you have to pay tax on crypto in France?

Yes, crypto is taxed in France. The Direction Générale des Finances Publiques (DGFiP) is clear that crypto is viewed as a moveable asset and that any capital gains from the disposal of a moveable asset are taxable. As well as this, crypto mining rewards are viewed as non-commercial profits (BNC) subject to Income Tax.

How much tax do you pay on crypto in France?

The amount of tax you'll pay on your crypto depends on your transactions, your total annual income, and how you're viewed as an investor. Gains from disposals of crypto may be taxed at up to 30% PFU for occasional traders, or as non-commercial profits (BNC) and taxed at up to 45% for professional traders under the new guidance (formerly BIC tax). Crypto mining rewards are also viewed as non-commercial profits and subject to Income Tax of up to 45%, although there is the micro-BNC tax treatment available for smaller mining operations with a turnover of less than €72,600 for 2022 (€77,700 for 2023).

This guide is regularly updated

One last thing before we start - the rules on crypto tax are in constant flux. At Koinly we keep a very close eye on the DGFiP's crypto policies and regularly update this guide to keep you informed and compliant.

26 April 2023: Updated with new rates, dates, changes for PFU, BNC, and BIC taxes & more.

15 February 2022: Updated to include Dac8 directive for crypto assets.

24 May 2021: Welcome to your France cryptocurrency tax guide!

Can the DGFiP track crypto?

Yes, the DGFiP can track your crypto holdings.

Despite the popular belief that crypto is anonymous, as crypto has moved closer toward the mainstream, tax offices around Europe have started paying attention and regulating centralized crypto exchanges.

As part of these regulations - specifically - European Union’s Sixth Anti-Money Laundering Directive, every company that provides financial services to cryptocurrency customers and businesses has to comply with much tougher regulations about when and how they identify customers. Data is made available between EU member states in a bid to stamp out money laundering and illegal activities.

There is a new EU directive on data sharing - Dac8 - which is likely to take effect later this year. Under the proposed directive - it's likely the DGFiP will have the ability to check whether someone owns crypto, as well as have the authority to look into crypto companies' accounts and gain insight into crypto assets.

And if you're thinking about just not reporting your crypto taxes to the DGFiP at all... think again. The punishment for tax evasion in France is a penalty of up to 80% of the tax due, up to a €500,000 fine, and up to 5 years imprisonment!

Is any crypto tax free in France?

Let's start with the good news - not all your crypto is subject to tax in France.

In even better news, France is quite liberal compared to other tax offices in what they view to be a taxable transaction (or a disposal in tax jargon), meaning the DGFiP only views converting your crypto for cash as a disposal of crypto - so you won't pay tax on crypto to crypto trades. Overall, tax free transactions include:

• Trading one cryptocurrency for another - including trading NFTs, stablecoins, and tokens for crypto, and vice versa.
• Buying crypto with EUR or another fiat currency
• Holding crypto
• Transferring crypto from one wallet to another

As well as this, capital gains from disposing of crypto (selling it for fiat currency) up to €305 a year are tax free.

How is crypto taxed in France?

Cryptocurrency is generally viewed and taxed as a movable property or asset in France, with the exclusion of crypto mining rewards which are subject to BNC.

When you dispose of a movable property, you'll pay Income Tax (impôt sur les revenus) on any gain as a result. The DGFiP is clear that the only thing they view as a disposal is converting your crypto for fiat currency, so selling your crypto for cash, whether that's euros or another fiat currency.

However, the way you're taxed depends on how you're viewed as an investor; specifically, whether you're viewed as an occasional trader or professional trader. Under the new guidance as of January 2023, most investors will be treated as occasional traders, but we'll cover both.

Occasional traders will pay PFU (Prélèvement Forfaitaire Unique). This is a flat levy of 30% that applies to income from financial investments including crypto, dividends, securities, and so on. As it's a flat tax, as opposed to a progressive tax, your total annual income does not matter. The tax rate is made up of 12.8% Income Tax plus a 17.2% social security contribution. High earners may also need to pay an exceptional Income Tax rate at a maximum marginal rate of 4%.

All this said, under the new guidance, each year when you complete your tax return, you can opt to waive the 12.8% tax and instead opt for a progressive scale of tax on your capital gains instead.

For low earners who are not taxable (under €10,777 for single taxpayers), this means they may theoretically only pay a 17.2% tax in social security contributions. Meanwhile, those within the 11% scale bracket (€10,778 to €27,478 for single taxpayers) may be able to reduce their rate to a 27.45% tax rate. You can opt to do this by ticking box 20P in Formulaire N°2042 when filing.

As well as this, of the 9.2% CSG (generalized social contribution) paid 6.8% is deductible for investment income including cryptocurrency gains.

Meanwhile, for professional traders, gains were formerly viewed as commercial profits or BIC (Bénéfices Industriels et Commerciaux).

However, again, this changes under the new guidance. The first big change is that under the new guidance, most investors aren't likely to be seen as professional investors. The second big change is that for professional investors, instead of their gains being viewed as commercial profits tax, their gains will instead be viewed as non-commercial profits or BNC (Bénéfices non-Commerciaux or non-commercial profits tax) instead.

The BNC tax regime is a specific tax system that applies to self-employed professionals who engage in non-commercial activities - including those with gains from professional trading under the new guidance. In the BNC tax regime, profits are still subject to the same Income Tax rates. But under the BNC regime, you're taxed on their net profits, which are calculated by deducting your expenses from your gross revenue.

As well as this, for investors with less than €72,600 in turnover in 2022, you can use the micro-BNC scheme. In simple terms, this means you'll receive a tax credit of 34% of your turnover, so you'll only pay a progressive tax of between 0% to 45% (based on Income Tax rates for 2022) depending on your turnover on 66% of your income.

It's a substantial difference, so let's break the differences between occasional and professional traders down further.

Occasional traders vs professional traders

How do you know whether you're an occasional trader or a professional trader in the eyes of the DGFiP? Well, under previous guidance it all came down to how much you were trading. However, there is new guidance that came into force on January 2023 - so we'll cover both.

Prior to the new reform, the key difference according to the DGFiP was how much you were trading, meaning if you were regularly engaging in crypto trading activities (we're looking at you degens), then you may have been viewed as a professional trader under the previous guidance and as such you would've paid the progressive commercial profit (BIC) tax rate of between 0 - 45%.

Meanwhile, if you were more of a long-term holder with occasional trades, you were more likely to be viewed as an occasional trader, and as such you would've paid the flat rate levy of 30% PFU tax instead.

The DGFiP decided this on a case-by-case basis based on the total amount invested, the total trade volume, and the frequency of crypto sales.

All this said, as of January 2023, all this changed under the tax reform and the frequency or volume of crypto trading will no longer determine whether you're a professional or occasional trader. Under the new guidance, if you sell crypto as part of the management of your private assets (so most investors), you'll automatically come under the PFU levy - regardless of the number of transactions or amount.

Only investors who engage in cryptocurrency transactions in professional-like conditions - for example, executing numerous, sophisticated cryptocurrency transactions using advanced trading tools and techniques - will be considered professional traders. As well as this, under the new reform, capital gains from crypto for professional traders will be taxed as non-commercial profits (BNC), the same as crypto mining rewards.

If you'd like guidance on your financial circumstances, you should speak to an experienced crypto accountant in France for bespoke advice.

PFU tax rates

The PFU tax rate is made up of two taxes - Income Tax and social security contributions. These are set rates you can see below:

However, under the new guidance, each year investors may waive the 12.8% Income Tax and instead opt to use the progressive Income Tax rates. While this won't benefit most investors, it does benefit low-income earners within or under the 11% tax rate. You can see the Income Tax rates for single taxpayers for 2022 below.

Income Tax rates

As well as being able to opt for the progressive Income Tax rates for PFU tax for gains for occasional traders - the BNC tax regime for professional traders and crypto mining rewards is based on the Income Tax rates. For the 2022 tax year, these are:

Source

As you can see, for investors in the 11% tax rate, opting to waive the 12.8% tax rate would reduce their tax rate on crypto to 27.45% (minus CSG).

An important note for those using the BNC tax regime is the micro-BNC tax regime. This will apply to most investors as it's available for both crypto miners and professional traders with less than €72,600 annual turnover for 2022. The micro-BNC tax regime is complicated but essentially means your taxable profit is calculated from your annual turnover, less a 34% tax free allowance, meaning only 66% of your profits are taxable and taxed using the progressive Income Tax brackets above. For those using the BNC tax regime, you'll calculate your turnover differently from occasional traders calculating gains. Find out more.

For the remainder of this guide, we'll be focusing on calculating and reporting taxes for occasional traders and crypto miners predominately.

How to calculate crypto gains and losses

In order to calculate your tax liability - you need to be able to calculate your gains and losses. This starts with knowing your cost basis.

Your cost basis is how much it cost you to acquire an asset, plus any allowable fees, like a purchase fee.

Once you know your cost basis, simply subtract it from your sale price to calculate your gain or loss.

If you have a gain, you have a capital gain which will be subject to PFU at 30% (or less if you opt to waive the 12.8% in favor of a lower rate).

If you have a loss, you have a capital loss. And while nobody likes losses - they're actually good news for your tax bill.

Crypto losses

You can offset your capital losses against your capital gains to reduce your net gains and therefore your tax bill. But the DGFiP is quite strict with this - meaning you can only use capital losses from that year to offset against capital gains from the same financial year. Unlike losses from securities, for example, you cannot carry crypto losses forward to utilize them in the future.

Cost basis method

Our example above on how to calculate gains or losses was a bit simplistic. The reality is most crypto investors have multiple assets of the same kind, for example, several ETH, BTC, and so on. So how do you which cost basis to use and when?

For example, let's say you owned 3 ETH, all of which you bought for a different price and on a different date. You then sold 1 ETH, how do you know which cost basis to use to calculate your gain or loss?

Well, the DGFIP is very particular about this and says to use the plus values de cessions d'actifs numériques formula, or the PVCT method. This method states that when you dispose of a crypto asset, you'll calculate the cost basis by the fraction of the acquisition cost of your crypto portfolio (i.e. your entire crypto holdings) relative to the sales proceeds, divided by total portfolio value. It's complicated, so let's break it down a little.

The plus values de cessions d'actifs numériques formula is:

Sale price – (total acquisition costs x [sale price/total portfolio value])

• Sale price: amount received when you sold a crypto asset.
• Total acquisition costs: the price (in EUR) to purchase your crypto plus any allowable fees.
• Total portfolio value: the price (in EUR) paid for your entire crypto holdings.

So for example, you buy 1 ETH for €1,500. That's your acquisition price.

You sell your 1 ETH for €2,000. That's your sale price.

You have other assets in your crypto portfolio. The total portfolio value including your ETH mentioned already is €20,000.

So following the formula above.

• Divide the sale price by your overall portfolio value, so 2,000 divided by 20,000, giving you 0.1.
• Now multiply your acquisition price by 0.1. So €1,500 x 0.1 would give you €150.
• Now subtract your figure from your sale price, giving you €1,850. This is your cost basis.
• So, your overall gain from selling your ETH would be €150 (€2,000 - €1,850).

If you're panicking about how complicated the formula above is - don't. Koinly supports the French PVCT cost basis method and can help you calculate your gains and losses according to the plus values de cessions d'actifs numériques method.

Tax free crypto transactions

Taxed crypto transactions

What about other transactions?

If your transactions haven't yet been covered in this guide, the simple reason is the DGFiP hasn't yet released guidance on them. There are a huge number of common transactions without any specific guidance from the DGFiP including:

• Spending crypto
• Staking rewards
• A variety of DeFi investments including liquidity pool mining, staking, lending, and more.

If you have any of these transactions, you should speak to an experienced crypto accountant for bespoke advice on your investments. This said, we can examine the existing guidance as to what tax implications may be likely.

Spending crypto tax

In most instances, when you spend crypto, you're actually converting your crypto for a given fiat currency at its fair market value on that day. This is the case for many crypto credit and debit cards. As such, any perceived gain from spending crypto in France may potentially be subject to the 30% PFU tax.

Staking rewards tax

The DGFiP has not released any guidance on the tax treatment of staking rewards yet, although the question has been raised.

As mining rewards are treated as non-commercial profits, there is the potential that staking rewards may be viewed in the same manner. However, some European tax offices have also taken the view that staking rewards as part of participation in a PoS consensus mechanism are deposits or "inflow" of crypto and are not taxed until disposal.

As well as this, there are other unanswered questions - for example, what would the reward’s acquisition cost price be, €0, or the fair market value in euros on the day you received it?

As such, it's advisable to speak to a crypto accountant if you have staking rewards in lieu of clear guidance.

DeFi tax

There is no guidance from the DGFiP on the tax implications of DeFi transactions.

In the existing guidance, the DGFiP only views a disposal as selling your crypto for fiat currency. As such, a number of DeFi transactions may effectively be viewed as tax free - for example, trading capital for liquidity pool tokens. However, without explicit guidance, you should seek the advice of an experienced tax professional for help with your unique circumstances.

When do I need to report crypto taxes in France?

You report your crypto taxes as part of your annual tax return (impôt sur le revenu) in France - and there are some key days you need to know about.

First of all, the French tax year runs from 1 January to 31 December. So this is the period you'll be reporting on in your tax return.

The deadline for your tax return depends on the department (region) you fall into. They're as follows:

How do I report crypto taxes in France?

The easiest way to report your crypto taxes is online using your FranceConnect account. In fact, it's now mandatory to use the online declaration unless you are unable to do so, in which case you must submit a paper declaration instead.

The forms are available both online and as paper forms - and there are several you potentially need to report your crypto to the DGFiP depending on your transactions.

• Formulaire 2042: The main tax return form where you must declare all your income, which all taxpayers must file. You may file as a single taxpayer or jointly as a married taxpayer.
• Formulaire 2086: This is attached to Form 2042. It's to declare your capital gains and income transactions, so any gains or losses you have from selling crypto for fiat currency.
• Formulaire 2042 C: If you have mining income, or other income viewed as BNC.
• Formulaire 3916-bis: Declare any cryptocurrency accounts opened outside France.

An important note though, Form 2086 only allows for 20 itemized disposals. If you made more than 20 disposals, be it crypto or otherwise, you should speak to a crypto accountant for advice.

How to calculate and file your crypto taxes with Koinly

Now you know how crypto is taxed and how to calculate and file your taxes with the DGFiP - let’s take a look at how it works with Koinly. 

Koinly saves you hours by calculating your crypto taxes obligations for you. Here's how easy it is:

1. Sign up for a free Koinly account.
2. Select your base country (France), currency (EUR), and cost basis method (PFU).
3. Connect Koinly to your wallets and exchanges. Koinly integrates with Binance, Coinbase, Kraken, and hundreds more. (See all)
4. Let Koinly crunch the numbers. Make a coffee.
5. Ta-da! Your data is collected and your crypto tax report is generated! Koinly can generate a variety of reports including Formulaire 2086.
6. To download your crypto tax report, upgrade to a paid plan from €39 per year.
7. Send your report to your accountant, or complete your tax return yourself using the figures from your Koinly report.

What records do I need to keep?

Most tax offices around the world require residents to keep detailed records of cryptocurrency transactions for 5 years. France is no different. It's advisable to keep the following records:

• the date of your crypto transactions
• the value of the cryptocurrency (in EUR) at the time of the transaction
• what the transaction was for and who the other party was

Koinly can help with record keeping. By syncing your wallets and exchanges to your Koinly account you will have one central dashboard from where to record and view all of your crypto activity. Portfolio tracking is available on a free Koinly plan.

How to reduce your crypto tax bill

You can't outright avoid crypto taxes in France without facing some steep penalties, fines, and even jail time - but you can legally reduce your tax bill by getting strategic.

Track and harvest losses

Using a crypto portfolio tracker (like Koinly!) can help give you a macro and micro overview of the performance of your crypto portfolio and holdings. You can use this to spot unrealized losses - that is, crypto that has decreased in price since you acquired it - and harvest these losses to offset any gains.

It's particularly important to make the most of your losses in France, as you can't carry losses forward to future financial years. So knowing when to harvest your losses can have a significant impact on your tax bill.

Take advantage of lower tax bands

Those in the 11% Income Tax band or lower can opt to waive the 12.8% tax as part of PFU and opt to be taxed using the progressive Income Tax bands instead. This could reduce your PFU tax rate to 28.2% or lower!

Cash out to stablecoins instead of fiat

The DGFiP only views a disposal as when you convert your crypto to a fiat currency like euros. Before this, it's not taxable, so taking your gains by trading your crypto for stablecoins is a way to cash out while the price is high without paying any tax!

The information on this website is for general information only. It should not be taken as constituting professional advice from Koinly. Koinly is not a financial adviser. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances. Koinly is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.