Capital gains on cryptos: the law is changing


2022 was very clearly the annus horribilis of cryptocurrencies, mixing scandals galore and massive drop in prices. How can we bode well for 2023? In any case, this is what the French tax authorities seem to think, whose reform on capital gains on cryptocurrencies, voted a year ago, comes into force on 1er January 2023.

As a reminder, until now, the tax regime on capital gains collected during the sale of digital assets depended on the occasional or habitual nature of the transactions carried out during the year.

If the taxpayer made capital gains on an occasional basis, a flat rate of 12.8% – excluding social security contributions – applied. If the capital gains were usual, then a progressive scale applied in the category of BIC, or industrial and commercial profits.

Bringing crypto investors closer to stock investors

Well, know that at 1er next January, the package is over. The progressive scale will apply to gains made in 2022 and to be declared to the tax authorities in 2023. From 1er January 2023, the taxation of realized gains will depend on the quality of the investors – understand retail investors or professional investors.

In detail, the capital gains collected by taxpayers who sell cryptocurrencies as part of the management of their private assets will still be taxed at 12.8% – excluding social security contributions. But this regardless of the frequency of their transactions, whether occasional or habitual. It should be noted that these taxpayers will be able to waive this flat-rate tax and opt for the application of the progressive scale of tax, if it is in their interest.

There remains the status and level of taxation of so-called professional investors, some of whom may be… individuals. Because yes, the devil is in the details.

Capital gains collected by taxpayers who engage in transactions on cryptocurrencies “under conditions similar to a professional”, indicates Que Choisir, will be subject to the progressive scale of tax in the category of BNC (non-commercial profits) . And not in the category of BIC (industrial and commercial profits).

So, who are these particular taxpayers who realize capital gains “under conditions analogous to a professional”? Well, it’s going to be investors who do “many and sophisticated trades”, and who “use the same tools and techniques as professional traders”.

Therefore, this category of investors should be subject to the same tax regime as taxpayers who operate on the stock markets, and who are also taxed under similar conditions to stock market professionals. Note that the same will apply to taxpayers who mine cryptocurrencies.





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