French Cryptocurrency Taxation: What You Need to Know

French Crypto Taxation Explained

Bruno Le Maire, France’s economy minister, recently dropped a bombshell on the crypto community: no taxes on crypto-to-crypto trades. Instead, he insists that taxpayers need to cough up their euros when they convert their digital coins into traditional currency. Le Maire stated, “We believe that the moment the gains are converted into traditional money is the right time to assess tax.” In simpler terms, if you’re swapping Bitcoin for Ethereum, you’re in the clear—at least for now.

Why Tax Crypto-to-Crypto Transactions?

You might be asking yourself, why the distinction? Well, Le Maire argues that taxing gains only when they’re cashed out into fiats makes tracking transactions way easier. Imagine trying to figure out what you owe on each of your NFT swaps—it would be worse than mastering a Rubik’s cube blindfolded! By focusing on fiat conversions, the French government aims to simplify the tax collection process.

The VAT Angle

But wait, there’s more. The French crypto tax strategy doesn’t just stop at capital gains. Le Maire also touched on the application of the Value-Added Tax (VAT) to cryptocurrencies. According to him, taxes will kick in when cryptocurrencies are used to purchase goods or services. Think about it—buying that luxury handbag with Bitcoin? Get ready to add VAT to your payment. When it comes to spending crypto in France, expect the VAT to join the party!

Across the Border: The Portuguese Perspective

While France is tightening its grip on crypto taxes, Portugal appears to be living in blissful tax-free paradise. As reported in August, the Portuguese Tax Authority clarified that both cryptocurrency trading and payments in crypto are exempt from taxes. Now, that’s a tempting offer for crypto enthusiasts looking to escape the tax man’s grasp!

Potential Changes in the U.S. Too

Meanwhile, tax discussions are heating up on the other side of the Atlantic. A tax bill making the rounds in the U.S. House of Representatives seeks to exclude gains or losses on like-kind exchanges of virtual currency. Perhaps the U.S. might take a page from France’s playbook or Portugal’s, but only time will tell.