Guide to Cryptocurrency Taxation in France (2023)

We’ll cover everything you may need, but remember, you may not need everything here. Just click on the section below that is relevant to what you are looking for. We’ll go over every topic thoroughly while making it easy to comprehend.

Contents

• Important dates

• Which forms will I have to fill out?

• How are cryptocurrencies taxed in France?

• Taxation as an individual or professional

• Detailed Information on different transaction types

• How to file your own crypto taxes easily

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Important Dates 2023

In France, the tax year goes from January 1st to December 31. Online reporting starts on April 8th.

For paper tax returns, the deadline is May 22nd. For online tax reports, the deadline depends on which county or département you live in.

Return Dates for 2023:

• Departments 01 to 19 (zone 1) - 26th May
• Departments 20 to 54 (zone 2) - 1st June
• Departments 55 onwards (zone 3) - 8th June

For non-residents, the tax report deadline is May 26th.

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Which Forms Will I Have to Fill Out?

You will need to report all the gains made in fiat money from cryptocurrency in the annual tax report (impôt sur le revenu(IR)) the same way that you report your income. If you have any questions, you can call the DGFiP at +33 (01 40 04 04 04).

An important point to note: if you receive a salary in cryptocurrencies or if you mine them, then you will have to declare this income, even if it is not converted into fiat currency.

In France, when reporting your income tax, you should use form 2042 for all income made. To report your cryptocurrency returns, you need to submit three extra forms, depending on how you made money through crypto.

• Form 2042 C to declare income.
• Form 2086 to declare capital gains.
• Form 3916-bis to declare cryptocurrency accounts opened outside of France.
  

Form 2042 C

The first one you have to fill out is the basic income tax report page. Inside this form, there is a section dedicated to cryptocurrency. All you need to do is fill in line 3AN of form 2042 C in the event of an overall capital gain, or line 3BN in the event of an overall capital loss.

For those of you using Divly for your taxes, the 3AN or 3BN figures will be provided on your Divly Report.

See here for steps on how to fill in Form 2042 C online

Form 2086

Taxpayers must declare all the money made from crypto sales using Form 2086.

The declaration of cryptocurrencies requires meticulous reporting, including information on each cryptocurrency sale and its profit/loss calculations.

For Divly users, Divly can provide this form so you don’t have to manually calculate your taxes.

If you are interested in how calculations for Form 2086 are made or how to find and declare Form 2086 in your online declaration, use our guide to declaring Form 2086.

Form 3916-Bis

Many cryptocurrency and share exchanges are based abroad, such as Coinbase, Binance, Bitstamp, and DeGiro. You must declare your foreign accounts on the Cerfa form n°3916-bis, even if they are no longer used, but still open.

You need to fill out one 3916-bis declaration per foreign exchange. For example, if in 2021 you had 5 foreign exchanges, you will have to fill out 5 3916-bis forms.

Caution: Even empty, accounts held abroad must be reported. You will also have to report accounts holding cryptocurrencies that cannot be converted into traditional currency. However, digital assets held on a ledger are not covered by this reporting obligation. Tokens in a physical wallet do not need to be declared.

Our guide to declaring Form 3916-BIS covers the information needed for over 80 exchanges, as well as how to find and declare Form 3916-BIS on your online declaration.

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How Are Cryptocurrencies Taxed in France?

In France, cryptocurrency gains are taxed when converted to fiat currencies like Euros or when used for purchasing goods & services. Trades between cryptocurrencies are not taxed. Gains are taxable if the total trade value exceeds 305 euros annually. Such gains are subject to a 30% flat tax.

Important: Although the 150 VH bis of the General tax code specifies that trading less than 305 euros worth is not taxed, it must still be reported

Calculating Your Profits

Knowing that your profits are subject to a 30% tax is important, but how do you calculate your profits?

The revenue of a transaction is generally straightforward: it's the value you received upon selling your cryptocurrency. However, if you have made many cryptocurrency transactions before this sale, determining the costs of your sold crypto can be uncertain. These costs are needed to deduct from the revenue to find your profit.

Calculating Costs of Sold Crypto

Most countries use a cost method such as FIFO, LIFO, or Average Cost Basis. In France, calculating the cost portion of the profit (revenue - cost) is quite complex. The cost you deduct for each individual trade depends on several factors: the portfolio value at the time of the transaction, the all-time acquisition cost of your crypto portfolio, and the amount of your costs previously allocated to other sales.

The most complex part is finding the portfolio value at the time of each trade. This requires knowing which currencies you own and in what amounts at the time of every crypto sale.

Individual Transaction Profit Calculation:

Profit = Sale Price [after fees] - ((Total Acquisition Costs - Previously allocated costs) * Sales Price) / Portfolio Value.

At first glance, this formula may not seem clear. If you are not interested in the details, feel free to skip this part. However, if you're curious about how it works, read on!

Breaking Down the Calculation:

• Total Acquisition Costs - Previously allocated costs: This calculates the acquisition cost remaining in your portfolio, which is the amount you can still allocate to your sales for their profit-loss calculations.

• Sales Price / Portfolio value: This calculates what proportion of your total portfolio you are selling.

• Multiply the two together: You’ve allocated your remaining acquisition costs over the share of your portfolio being sold.

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Taxation as a Professional

The tax regime for professionals differs from that of private investors.

Determining whether you are considered a professional or an individual trader in the eyes of French tax law can be nuanced. The French administration generally views the professional status as an exception, with most cryptocurrency owners being classified as individual, or "occasional," traders. This means they are subject to the flat tax regime for individuals.

However, frequent use of computer tools for trading or having trading income higher than professional income are not, in themselves, sufficient criteria for professional classification. The determination is made on a case-by-case basis, focusing on factors such as the tools used and the level of rationalization and sophistication of the activity.

For example, traders working for investment funds and using their tools for personal savings have been classified as professionals. The distinction can be more ambiguous in cryptocurrency trading, as most traders have access to similar tools.

It's important to note that individuals engaged in occasional digital asset trading are taxed under Article 150 VH bis of the General Tax Code, while professional traders are subject to the Non-Commercial Profits (BNC) regime.

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Detailed Information on Different Transaction Types

You are taxed when you convert crypto to fiat and when you use crypto to purchase goods and services. But there are other scenarios to consider, such as earning mining or staking rewards and how these transactions impact the total acquisition cost for tax calculation purposes.

Below are tables providing a quick overview of each transaction type, followed by more in-depth explanations.

How are Cryptocurrencies Taxed in France

Transactions where you Receive Crypto

Transaction Type	Impact on Acquisition Cost	Is it Taxed?
Buy Crypto	Increase	No
Trade Crypto for Crypto	No Change	No
Initial Coin Offering	No Change	No
Transfer Crypto Between Your Own Wallets	No Change	No
Receive Crypto as a Gift	Increase
Airdrop	No Change	No
Fork	No Change	No
Staking Reward	Increase	Yes
Mining	Increase	Yes
Income	Increase	Yes
Margin Profit	No Change	No
Purchase an NFT with fiat	Increase	No
Purchase an NFT with crypto	No Change	No

Buying Crypto

Buying cryptocurrency for fiat is not a taxable transaction. The fiat spent will contribute to your total acquisition cost, which is required for tax calculations when you sell your crypto.

Trading Crypto for Crypto

Unlike many other countries, trading one cryptocurrency for another (e.g., ETH to BTC) is not a taxable transaction. This includes trading in stablecoins. However, taxes apply when you sell stablecoins for fiat.

Staking

There are no explicit regulations regarding passive income, but tax professionals generally agree that staking rewards fall under Non-Commercial profits (BNC)incomeTaxes apply only when you sell your staking rewards for fiat money.

Furthermore, sending crypto to DeFi platforms for staking can affect your portfolio value, as the coins sent for staking are no longer in your wallet. Each time you sell cryptocurrency the profit calculations depend on the current value of your portfolio, therefore it is important to account for all of the cryptocurrency that you own.

If you sell a cryptocurrency while staking on a DeFi platform, you must use your entire portfolio’s value for calculations. Divly will not automatically know that crypto sent away was sent to a DeFi platform for staking.

To avoid this, you should convert any deposits/withdrawals to and from the DeFi platform to “transfers”.

Mining

If you are mining as an individual, the proceeds are classified as passive income from a hobby based on article 92 of the General Tax Code. You are required to declare and pay Income Tax on mining proceeds. Profits made from mining result in a BNC tax of 45%.

Futures & Derivatives Profits

Earning cryptocurrency from derivatives is not a taxable event until you sell your cryptocurrency for fiat. The cryptocurrency received will not contribute to your acquisition cost, but it will contribute to your portfolio value.

NFTs

The trade of NFTs is not taxed under the French government unless it is sold for fiat money. . Until fiat money is involved, there is no taxation. NFT transactions are considered under the income tax rule, specifically as income through capital gains.

Crypto Acquisitions, Portfolio Value, and Acquisition Cost

Although crypto may be acquired for free, you will still have to pay taxes over it when sold.

Furthermore, even if transactions do not increase your acquisition cost, they may still affect your portfolio value by increasing the amount of crypto owned.

Receiving crypto from an airdrop, although free, may actually increase your taxes on other sales because your portfolio value has now increased.

Transactions Where You Send Crypto

Transactions and Taxability

Transaction Type	Is the Transaction Taxable?
Transfer Crypto	No
Sell Crypto	Yes
Purchase Goods & Services with Crypto	Yes
Pay the Trading Fee with Crypto	Yes (as part of the sale transaction)
Pay Transfer Fee with Crypto	No
Lost or Stolen Crypto	No
Give Crypto as a Gift	No
Donate Crypto	No
Lend out Crypto	BNC Tax (passive income tax)
Margin Loss	No

Selling Crypto

You are taxed once you sell a cryptocurrency for a fiat currency like euros. The tax is levied on the difference between the sale price at the time of the transaction and the acquisition cost.

Purchase Goods & Services

When you purchase goods (e.g., a new computer, Amazon gift card) or pay for a service online (e.g., VPN service), you must pay capital gains tax on the crypto you spent. This is treated the same as selling crypto for fiat.

Pay Transfer Fees with Crypto

Transfer fees when moving crypto between your own wallets are not taxable. No capital gains or losses are incurred in this transaction.

Pay Trading Fees with Crypto

When you sell crypto for fiat and incur a crypto fee, the value of the trade increases by the value of the crypto fee. This is not declared separately but is part of the overall transaction.

Gifts

While no capital gains tax is required for crypto sent as a gift, you may have to pay a gift tax.

Donations

Donations are not taxable transactions. However, they lower the portfolio value. Tax deductions may be allowed for donations made to qualifying organizations. For more information, visit the Public Service website.

Futures & Derivatives Losses

Derivative losses, as with derivative profits, are not taxable events. You cannot deduct your derivative losses from your gains. Beneficially, no acquisition cost is allocated to it, meaning your acquisition cost will not decrease and can be used to offset gains elsewhere.

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How to File Your Own Crypto Taxes Easily

We’ll cover two main areas here: first, how to obtain the necessary figures you need to report, and second, we’ll direct you to our step-by-step guides for filling in forms 2042C, 2086, and 3916-bis.

Although this information is applicable to anyone, we’ll frequently reference declaring figures that Divly’s tax platform generates for you.

Using Divly’s Crypto Tax Platform to Declare Your Cryptocurrencies

Divly was founded on the idea that one-size-fits-all reporting was not sufficient for the unique requirements of each country in the European Union.

Therefore, Divly is a crypto tax platform designed with the French 150 VH bis of the General Tax Code in mind. Divly provides everything needed for your declarations in forms 2086 and 3916 bis. You can find samples of Divly’s French tax reports here.

By uploading your transaction history from your exchanges to Divly, the platform will automatically import all transactions and label your transfers between wallets. Divly then performs the necessary tax calculations.

For more benefits, visit our features page, but some key ones include:

• Tax filings for 2021 and earlier years at the price of only 1 year.

• Localized tax reports for France.

• Utilizes 150 VH bis of the General Tax Code.

• Support for over 150 exchanges and wallets.

• Compatibility with over 10,000 crypto assets.

Four Steps to Getting Your Taxes Done with Divly

Step 1: Create a Divly Account

• Account Creation: Register an account on Divly by providing an email and password, or use your Google account for convenience. Create an account here.

  • Note: Divly values your privacy; no need to provide sensitive information like your name or social security number.

• Set Preferences: After registration, select your tax country, local currency, and preferred language. These choices are crucial as they determine the tax rules, currency conversions, and output applicable to you.

Step 2: Import Your Transactions

• Add Wallets & Exchanges: Start by clicking on the 'Add Wallets & Exchanges' button.

• Choose Import Method: Depending on your wallet type, opt for the Automatic Import or File Import method. The default option is usually the best choice.

• Add Remaining Wallets: Continue adding all your wallets, including exchanges and hardware wallets. It’s essential to import all transactions to accurately calculate your tax obligations.

Step 3: Review Your Transactions

• Note: Often everything is fine and no edits are required to be made. In this case, you can move on to the next part of the guide and declare your taxes.

• Verify Crypto Balances: Check your total crypto holdings on the Overview page to ensure they match your actual holdings. Discrepancies might indicate missing or incorrect transactions.

• Examine Wallets and Transactions: Confirm all wallets are imported. If any are missing, add them via 'Add Wallets & Exchanges'.

• Resolve Transaction Warnings: Address any warnings related to missing price information or purchase history. Divly’s guide can assist in resolving these.

• Match Transfers and Label Transactions: Ensure transfers between your wallets are correctly matched and label specific transaction types (e.g., gifts, mining, airdrops) correctly for accurate tax implications.

Step 4: Download Tax Report + Declare Taxes

• Select Tax Year: On the Tax Report page, select the year you are declaring for, e.g., 2023.

• Generate Tax Report: Click 'Generate Tax Report 20XX' and select the report you would like to download. The French export comes with two files: one with an overview of what you need to declare, and the other is an itemized list of your capital gains transactions, which you will need for your 2086.

• Lock Your Transaction History: Once declared, lock your transaction history. This way, you can safely import future transactions for future declarations without any accidental changes for years you’ve already declared.

Alternative to Crypto Tax Software

An alternative to using crypto tax software is the use of an accountant specialized in cryptocurrency taxes for France. While using an accountant can mean higher hourly costs, it also allows for a more personalized approach.

How to Declare to the Tax Authorities

You can find our guides for using Divly to fill in the various forms. We have one guide available for form 2042 C and 2086, and another guide for form 3916-bis. Should you have any questions during the declaration process, you can reach out to our customer support team or contact the DGFiP directly at +33 (01 40 04 04 04).

Online Reporting is Mandatory

Online reporting is now mandatory for all French people. The paper declaration is reserved for taxpayers in the following situations:

• Living in a white zone,
• Not having internet access in their main residence,
• Not knowing how to use the internet even if you have access,
• Filing their first income tax return without having received their identifiers from the tax authorities.

Please note: If you choose paper filing without a valid reason, you risk a fixed fine of 15 euros.

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FAQ

How did Crypto Tax Regulations Change in France on January 1st, 2019?

Regulations on capital gains on cryptocurrencies came into effect on January 1st, 2019. This marked a significant change in how cryptocurrencies were treated tax-wise. To read more about the system in place before 2018, see our guide on Cout-Unitaire-Moyen-Pondere et 2018.