The French National Assembly has rejected several proposed amendments aimed at providing tax relief for cryptocurrency traders and users, marking a significant development in the country’s evolving regulatory stance on digital assets. The decisions, made during a parliamentary session on Monday, reflect ongoing debates over how best to integrate cryptocurrencies into the existing tax framework without compromising fiscal responsibility or fairness.
Key Amendments Turned Down
Among the most notable proposals dismissed was an amendment to increase the annual tax-free allowance for cryptocurrency gains from €305 (approximately $347) to either €5,000 or €3,000. Lawmakers argued that the current threshold is already favorable compared to other investment vehicles. One parliamentarian stated that raising it so dramatically would be “particularly excessive,” especially when contrasted with the taxation of traditional securities.
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Another rejected proposal sought to align the taxation of crypto capital gains with that of conventional securities—ensuring equal treatment under identical conditions. Advocates believed this would promote fairness and encourage broader adoption. However, the assembly did not support the change, leaving crypto assets subject to a separate and often more complex tax regime.
Additionally, lawmakers voted against a measure that would distinguish between regular crypto-related activities (such as trading or mining) and occasional transactions by individual users. Proponents argued that such differentiation could lead to more tailored and equitable taxation, particularly benefiting casual investors who might otherwise face disproportionate tax burdens.
A related amendment concerning the treatment of capital losses from cryptocurrency transactions was also dismissed. Had it passed, it would have allowed investors to offset losses against gains, a common practice in traditional financial markets but currently limited in France’s crypto tax policy.
Timing of Tax Liability: A Critical Debate
One of the more technically nuanced amendments rejected was outlined in Article 16a. It proposed that taxation should only apply when cryptocurrencies are sold and withdrawn into a bank account—rather than being triggered merely by conversion into fiat currency on an exchange platform.
This distinction is crucial for users who may convert crypto to euros on an exchange but choose not to transfer funds off-platform. Under current interpretation, such conversions can still trigger taxable events, creating confusion and potential compliance challenges. The amendment aimed to clarify this issue but failed to gain legislative traction.
Current Tax Regime Remains Intact
Despite these rejections, one major proposal—introducing a flat 30% tax rate on cryptocurrency transactions—was not part of Monday’s debate. As a result, the existing tax structure remains unchanged: digital asset gains are taxed at a total rate of 36.2%, composed of a 19% income tax and a 17.2% social contribution.
This rate is notably higher than the 30% flat tax applied to most other non-real estate capital gains in France, such as stocks or bonds. According to Reuters, this discrepancy has sparked criticism from industry observers who argue that it places crypto investors at a disadvantage.
However, there is growing recognition within legislative circles that simplicity and legal certainty matter. During discussions, some members acknowledged that a unified tax rate could streamline compliance and reduce administrative burdens—a sentiment echoed in earlier analyses.
In fact, news.Bitcoin.com reported that the Finance Committee previously approved an amendment to the 2019 budget bill that would bring crypto asset sales under the same 30% flat-rate system. While that effort did not fully materialize, it signals ongoing interest in reforming the current model.
Why These Decisions Matter
France’s approach to cryptocurrency taxation influences not only domestic investor behavior but also its position within the broader European digital economy. With countries like Germany offering tax exemptions for holdings over one year and Portugal eliminating personal crypto taxes altogether (for non-professionals), France risks falling behind in attracting blockchain innovation and talent.
Moreover, inconsistent or overly restrictive policies may drive activity underground or push users toward offshore platforms, undermining regulatory oversight rather than enhancing it.
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Frequently Asked Questions (FAQ)
Q: What is the current tax rate on cryptocurrency gains in France?
A: Cryptocurrency capital gains are taxed at a combined rate of 36.2%, consisting of 19% income tax and 17.2% social contributions.
Q: Is there a tax-free allowance for crypto gains in France?
A: Yes, individuals benefit from a €305 annual tax-free allowance for capital gains from cryptocurrency disposals.
Q: Can I offset crypto losses against gains in France?
A: Currently, the ability to deduct capital losses from cryptocurrency transactions is limited and does not follow the same rules as traditional investments.
Q: When is cryptocurrency considered taxable in France?
A: Tax liability typically arises when crypto is exchanged for fiat currency or used to purchase goods or services—even if funds remain on an exchange platform.
Q: Was the proposed 30% flat tax on crypto approved?
A: No, the flat 30% tax was not included in the recent vote and remains under discussion as part of broader fiscal reforms.
Q: How does France’s crypto tax compare internationally?
A: At 36.2%, France has one of the higher effective tax rates on crypto gains in Europe, exceeding the standard 30% rate applied to many other capital assets.
Looking Ahead
While the latest round of amendments failed to pass, the debate underscores increasing legislative engagement with digital asset policy. As blockchain technology matures and adoption grows, pressure will likely mount for France to modernize its tax code in ways that balance revenue needs with innovation incentives.
Future reforms may revisit ideas like activity-based classification, loss carry-forward provisions, or alignment with standard capital gains rates—all of which could enhance clarity and competitiveness.
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For now, investors and users must navigate a complex landscape where crypto is treated distinctly from traditional assets. Yet with continued dialogue and data-driven policymaking, France has the opportunity to build a balanced, forward-looking framework that supports both fiscal integrity and technological progress.
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