Since 2019, you are required to declare the earnings you have generated from your investments in cryptocurrencies each year. A task that can be tedious, especially if you don’t know what boxes to fill in on your tax return.
From a tax point of view, cryptocurrencies are misnamed. And for good reason: the tax authorities do not consider them as currencies, but as investmentswhich is not without tax consequences.
In fact, when you make a capital gain Following the sale of your bitcoins or your ethers, you have three options. If you bought a material good with your cryptos, or if you exchanged your cryptos for euros, you must pay tax.
If so, this year again you will be systematically subject to the 30% taxation of the single flat-rate levy (PFU), or flat tax. Either 12.8% taxes and 17.2% of social levies. However, this is the last time.
Because the law has changed. And for gains made from January 1, 2023, you will have the choice between two tax regimes: the PFU or the progressive bar income tax. This change will be interesting for tax payers. 11% or less.
On the other hand, if you have realized a capital gain during an operation of a crypto to another crypto, you are not subject to tax. Only capital gains in euros will be taken into account by the tax authorities.
To note: some trading sites offer exposure to cryptocurrencies through derivative products, CFD calls. In this case, you do not own the actual cryptocurrency. You hold a contract that pays you the difference between the price of the crypto at the end of the contract and that at the time of the purchase of the derivative. If the crypto has, in the meantime, lost value, you lose the difference. These derivatives are taxed in the same way as shares held in a securities account.
Tax: how to avoid your bitcoins being taxed
Step 1: calculate the net gain
In concrete terms, the first step in declaring the income from your investments in cryptos is calculate the capital gain or the total capital loss for the year 2022. To do this, you must complete a specific document, the form 2086.
And the calculation is not so simple, because, unlike traditional investments, the capital gain is not strictly speaking obtained by subtracting the capital losses from the gains. The exact formula to apply is as follows:
capital gain or loss = transfer price (Total acquisition price x Transfer price / Overall value of the portfolio).
Let’s say you acquired bitcoin for 1000 euros. A few months later your portfolio is valued 5000 euros. You decide to sell some for a value of 2000 euros. Result, your capital gain will be: 2000 (1000 x 2000/5000) = 1600 euros.
The problem? You must repeat this operation for each new sale of assets carried out during the year. In other words, if you performed 1 crypto-euro arbitrage per week in 2022, you must now perform 52 calculations. And to make matters worse, the 2086 form only includes 5 boxes…
By adding all these capital gains (and capital losses if the resale price is lower than the purchase price), you get the amount indicated on your main income statement (the usual form 2042).
Step 2: fill in the boxes
In the event of a net gain, the capital gain is entered in the box 3AN. Unless it is lower 305 euros. In this case, you are exempt from taxes, and the 3AN box must remain empty, in accordance with article 150 VH bis of the general tax code.
To prove that you are in your right, the filing of declaration 2086 is still necessary. In case of losses, the amount of your total loss is indicated in the box 3BN.
the current time, this capital loss cannot be carried forward over the following years, as may be losses on securities.
Finally, do not forget to declare your bitcoins purchased abroad
Cryptocurrency is a global market. If there are platforms and brokers made in France, many investors go through foreign platforms and intermediaries, such as Binance, Kraken, Coinbase, Bitpanda… Whether or not they resold crypto in 2022, the crypto-savers must report to the French tax authorities the accounts held, used or closed abroad during the year 2022. To do this, complete the document 3916-3916bis. A declaration must be completed for each foreign account you hold. On the 2042 form, there is also an action to be taken in the event of foreign accounts opened, held, or closed in the last year, namely check the 8UU box.