France Crypto Tax: Correcting Oversights & Errors

Correcting errors in your tax declarations, especially those related to cryptocurrencies, is crucial to avoid potential penalties. Whether you’ve inadvertently omitted your crypto assets or made mistakes in previous declarations, it’s essential to address these issues promptly. This guide will navigate you through the consequences of not including your cryptocurrency in your tax filings and provide step-by-step solutions, even if you’ve missed the initial deadline.

What do I need to declare for my cryptocurrency taxes?

Understanding what needs to be declared regarding cryptocurrencies is the first step. This includes reporting any activity in a custodial account during the tax year, as detailed in 3916-BIS. Unsure about specific details regarding your exchange? Check our database for relevant information from each exchange.

Remember, selling your cryptocurrency for fiat currency (like euros) necessitates calculating your gain or loss on the transaction. If the annual value of your trades exceeds €305, then any gains are taxable at a 30% rate, requiring declaration in forms 2042c and 2086. Calculating gains can be complex, so refer to our complete guide to crypto taxes in France for examples and detailed explanations.

Important: Declaration is mandatory even if you’ve traded less than €305 worth of crypto

What Are the Penalties for Failing to Declare a Cryptocurrency Account?

Failing to declare your cryptocurrency account can result in significant fines. If you do not declare a cryptocurrency account, you are subject to a fine of up to €750. This penalty extends to situations involving omissions or inaccuracies in your declaration, with each such instance potentially incurring a €125 fine.

Moreover, the fines escalate for higher-value accounts. If the account you failed to declare, or inaccurately declared, has a value exceeding €50,000, the fines increase substantially. In such cases, the penalty for non-declaration jumps to €1,500, and for any omissions or inaccuracies, the fine is €250.

Important: You are required to declare these accounts every year, regardless of whether you have previously reported them. This means you need to either confirm the continued use of the account or report its closure

What are the Penalties for Late Tax Declaration?

Filing a late tax return is required if you haven't completed your tax declaration by the deadline. Be aware that there are late penalties according to Article 1728 of the Tax Code

• Voluntary Correction or Correction within 30 Days: If you submit a corrected declaration voluntarily, or within 30 days of receiving a formal notice to declare your income, you will be subject to an additional fee. This fee is 10% of the taxes you owe and is added on top of your existing tax liability.

• Failure to Correct Within 30 Days: If you do not correct your tax declaration within 30 days of receiving a notice, the situation becomes more severe. In this case, the additional fee increases to 40% of the taxes due.

Tax Authority Audits

It is important to note that the tax authority has the capability to audit your tax declarations for the last three years. For instance, in the year 2024, the tax authority can review your tax declarations going back to the 2022 declaration for the 2021 tax year.

What are the Penalties for Deliberate Omissions?

Penalties for Omission: If you intentionally omit information from your tax return, such as failing to declare a portion of your crypto assets, you will incur a significant fine. The penalty for such an omission is 40% of the tax amount due based on the omitted information.

Penalties for Deliberate Underreporting: In cases where you deliberately make errors with the intent to reduce your tax liability, the consequences are even more severe. These deliberate errors can lead to a fine of 80% of the tax amount due.

Criminal Penalties for Serious Cases: For the most egregious cases of tax evasion or fraud, the repercussions extend beyond financial penalties. Such deliberate acts can constitute a criminal offense, potentially resulting in a €500,000 fine and up to 5 years of imprisonment.

Do I Have to Pay Interest on Late Declarations?

Interest Charges for Late Filing: Filing your tax declaration late triggers an additional cost in the form of late interest charges. This interest is calculated at a rate of 0.20% per month.

Interest Calculation Period: The period for calculating this interest starts on July 1st of the year following the year in which the income was earned. For instance, if you earned income in 2022, the interest calculation would begin from July 1, 2023. This interest accrues until the last day of the month in which your tax declaration is ultimately filed.

Important

If you are the one who identifies the error and voluntarily submit a corrective declaration, the late interest charge will be halved. This is an incentive for taxpayers to self-identify and correct their errors.

Can I Correct Errors or Omissions in My Tax Declaration?

Correcting Post-Deadline Declarations: Yes, corrections to your tax declaration are possible even after the original submission deadline. This allows you to update or rectify your declaration to ensure accuracy.

How Can I Correct Errors in My Crypto Tax Declaration?

You can make a correction to your declaration online if you’ve previously completed the declaration online at impots.gouv.fr, if you’ve used the impots.gouv.fr app, or if you’ve benefited from an automatic declaration

Online Correction Process:

1. For online filings, visit espace particulier on impots.gouv.fr using a computer (not available on tablets or smartphones).

2. Log in with your tax number and password.

3. Select "Access online correction" ("Accédez à la correction en ligne").
   
   

4. After accessing the service, you can edit any incorrect elements in your declaration.

The online correction service is available annually from August 2nd to December 6th. Corrections can be made multiple times within this period.

If corrections are needed after December 6th, you have until December 31st of the year two years after the declaration year. For instance, you have until December 31st, 2022 to modify your 2020 declaration (2019 income year)

During this extended correction period, you should submit a réclamation to the Direction générale des Finances publiques. To do this, log in to the secure messaging service on your espace particulier at impots.gouv.fr. Once logged in, look for the section titled “Je signale une erreur sur le calcul de mon impôt,” which means "I report an error in the calculation of my tax." This is where you can initiate the correction process.

Alternatively, if you prefer or if online access is not feasible, you can contact your local public finance center to make the necessary corrections.

What Should I Do If I Filed a Paper Tax Declaration and Need to Make Corrections?

If you have filed your tax declaration on paper and need to make corrections, follow these steps to ensure your declaration is updated accurately:

1. Contact Your Personal Tax Service: Inform them about your intention to correct your declaration. Explain the reasons for the corrections and specify the amounts that need adjustment.

2. Prepare a Corrective Declaration: Draft a new tax declaration that includes all the sections of the original tax return, even those that do not require corrections.

3. Label the Corrective Declaration: On the first page of this new declaration, prominently write “DÉCLARATION RECTIFICATIVE, ANNULE ET REMPLACE”. This indicates that your new submission supersedes the previous one.