Tax time is here. Like every year, this mandatory step can cause a lot of trouble, even make you want to tear your hair out. Don’t lose hope: here’s how.
Spring brings good weather, allergies, and also, taxes. This immutable rule of nature, unpleasant as it is, is a must for everyone — and if you own cryptocurrencies, it applies to you too.
Bitcoin, Ethereum: are crypto-currencies taxable?
Since 2018, capital gains on digital assets were taxed in France were subject to a flat tax. But in 2023, a lot of things are changing. Article 79 of the finance law for 2022 modified the tax regime applicable to crypto-currencies, and came into force on January 1, 2023. It is therefore no longer the same operations that you must carry out. However, owners of crypto-currencies, both individuals and professionals, remain taxable.
There are now different options for declaring cryptos, and some users will be able to choose a progressive scale. ” Transfers carried out on a non-professional basis will systematically fall under the single flat-rate deduction regime “, However, ” taxpayers will be able to choose to be taxed either at the flat rate of 12.8% or at the progressive scale of income tax », Specifies the Ministry of the Economy. .
How to declare your crypto-currencies?
For individuals
A little reminder to start: only capital gains of more than 305 euros are taxable, only if you have transformed your cryptos into fiat currency (for example, into euros), or into purchases of goods and services. If you have transformed your bitcoin capital gain into Ethereum, without ever going through the euro box, you are not concerned.
To make your declaration, you must first fill in form n°2086 and fill in the capital gains you have made. Everything must be accompanied by the details of the operations.
Capital gains can be taxed in two different ways. As indicated above, for individuals, disposals are systematically subject to the single flat-rate levy regime, but “taxpayers can” choose to be taxed either at the flat rate of 12.8% or at the progressive scale of income tax », Specifies the website of the Ministry of the Economy. The sentence is complex and not necessarily easy to understand, but concretely, depending on your income tax bracket, one option will be more advantageous than the other.
The single flat-rate levy is a 30% tax (the flat taxas it is also called), and it includes ” 12.8% for income tax and 17.2% for social security contributions “, as explained by the ministry. ” This is a flat rate, because this rate does not take into account your tax bracket and your reference tax income “. Whether you earn 10,000 or 100,000 euros per year, you pay the same.
In 2023, the new rules allow you to choose and adjust this plan, which can be advantageous in certain cases. If you choose to be taxed according to the progressive scale of income tax, depending on your salary, this may be more advantageous.
For example, if you are in the first income bracket, your income tax percentage is 0%, according to Public Service figures. If you choose to be taxed on your crypto with the progressive scale, you will therefore only have to pay 17.2% tax, in respect of social security contributions. Much more advantageous than the one-off flat rate of 30%.
If you are in the 2nd income bracket, you are deducted at 11%. It is therefore better to take the option ” progressive income tax scale for your cryptocurrencies. But for the following tax brackets, it is the opposite, and it will be better to choose the single flat-rate levy.
| Income brackets | Tax percentage |
|---|---|
| Up to €10,777 | 0% |
| From €10,778 to €27,478 | 11% |
| From €27,479 to €78,570 | 30 % |
| From €78,571 to €168,994 | 41% |
| Over €168,994 | 45% |
For mining
Please note, there is also something new here. If you have mining operations, you may also be subject to another tax: the activity ” falls under the non-commercial profits regime (BNC), under article 92 of the general tax code “, according to the ministry.
” The taxable result from this activity is determined in accordance with the rules of common law applicable to non-commercial profits, it being specified that the acquisition value used for the calculation of the taxable result is nil when the bitcoins have been allocated free of charge..”
If you are in this case, you will need to consult a professional.
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