When we talk about cryptocurrencies, the question of taxation is not always the first one we think of. Yet, it is important to know your obligations to avoid any problems with the tax authorities.
Since 2019, Article 150 VH bis of the General Tax Code has set up a specific tax regime for digital assets in France. In this article, we will see what your tax obligations are, how to fulfil them and what happens in case of non-declaration.
What are the tax obligations for cryptocurrency holders in France?
There are two tax obligations for cryptocurrency holders in France.
The first is the declaration of taxable transactions in the 2086 form, which is mandatory for any expensive transfer of cryptocurrencies to a fiat currency, or for any purchase of goods and services using cryptocurrencies.
When reporting, it is necessary to fill in the capital gains or losses for each taxable transaction. To calculate these capital gains or losses, you need to know the total amount invested in fiat currency to buy your cryptocurrencies, as well as the total value of your cryptocurrencies at the time of sale in fiat currency.
Note that the value of cryptocurrencies can fluctuate quickly, so it is important to consider the value of the cryptocurrencies at the exact time of the sale.
The calculation can be complex when you have made several hundred or thousands of transactions. However, there are solutions to automatically calculate taxable capital gains or losses. We will come back to this later.
The second obligation is the declaration of accounts held, opened or closed abroad, in the 3916-bis form. This obligation only concerns non-custodial accounts, i.e. those where you are not the direct manager of your funds.
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Do you have to declare your NGRAVE accounts to the French tax authorities?
The answer is no! Although NGRAVE is based in Belgium (so outside of France), the accounts are said to be custodial. This means that you are the manager of the funds in your wallet.
No need to declare it in the 3916-bis form!
How do I calculate and declare my capital gains or losses?
As seen above, calculating taxable capital gains or losses in cryptocurrency is complicated. Fortunately, there is a solution.
To help you in this task, you can count on Waltio, the n°1 crypto tax assistant in France.
Their software allows you to do the calculations automatically and get your tax documents in a few clicks.
To deposit your transactions from your NGRAVE account on Waltio, nothing could be easier. Just enter your public blockchain keys into the software and your transactions will be automatically recorded. On top of that, Waltio and NGRAVE offer you a 10% discount on your subscription with the code NGRAVE10.
When do you have to declare your cryptocurrencies to the French tax authorities?
You must declare your cryptocurrencies when you file your annual tax return. The closing dates for the online declaration area are as follows:
May 25, 2023, for departments between the numbers 01 and 19.
June 1, 2023, for departments between numbers 20 and 54.
June 8, 2023, for departments between numbers 54 and 976.
For the paper return, the closing date is May 22, 2023.
What are the risks of not declaring your cryptocurrencies?
Any French tax resident who fails to declare accounts held abroad is liable to a fine of 750 euros per undeclared account. In case of omission or simple error, the penalty can amount to 125 euros.
An increase is applicable for accounts whose value in digital assets exceeds 50,000 euros. It is important to note that even if the value of 50,000 euros is only reached once during the year, the surcharge will still apply.
To go further
Depending on the different types of cryptocurrency income, it is important to know that the tax interpretation may vary. For complete information on cryptocurrency taxation as well as other types of crypto transactions, it is highly recommended that you seek help from experts in the field such as Waltio or a tax attorney.
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