“Our target is simple: enter into the world of finance of the 21st century by guaranteeing all players the necessary security for their development … we should not miss out on the blockchain revolution,” says French Finance Minister Bruno Le Maire during a news conference in February 2018. In the statement the minister also addresses the wish to create a financial framework for initial coin offerings, wishing to make France one of the leading countries to include cryptocurrencies and the blockchain technology in their financial environment. Additionally, the French Council of State, which advises the government on legal matters, in April 2018 definied cryptocurrencies as "movable property" which made the tax rate on Bitcoin and Co. drop significantly.
Crypto taxation in France
The tax rate on Bitcoin in France was reduced to 19% in April 2018, following a new classification of Bitcoin. Cryptocurrency sales are considered as capital gains of "movable property". This means that private, non-commercial users are subject to income tax at a rate of 19%. In order for the 19% flat tax rate to be applicable, it has to be requested as soon as the capital gain is realised. Exemptions for this include for example transactions from cryptocurrency mining, which are taxed at the BIC (industrial and commercial profits) rate of 45%. Losses from cryptocurrencies can be carried forward and can be deducted from capital gains of the same nature in the same year of carried forward and set off against profits for 6 years. The tax year ends with 31 December. Tax returns have to be filed until 1 March but extended deadlines exist for online filing.
ICO regulations in France
There is no specific legal framework for ICOs in France, the AMF (autorité des marchés financiers) however issued a public consultation document summarizing opinions and statements of experts, research institutes, companies, individuals and many more. The report defines a set of guidelines for ICOs which, when followed, will obtain a visa by the AMF in the near future. The visa system enables legitimate ICOs to run more smoothly, making it for example easier to set up a bank account.
French banks on cryptocurrencies
La Banque de France, the french central bank, states cryptocurrencies to be a dangerous speculative asset. In an article from March 2018 the institution explains what issues and risks virtual currencies pose for investors and the financial market, hence portraying Bitcoin and Co. with a focus on its negative aspects due to market volatility and the uprise of ICOs. As a resumee the bank mentions that it’s necessary to find a solution concerning regulations on an international level as the technology is linked to the Internet and therefore not bound to national borders. In general, most banks in France have not yet issued an official statement and stay alert and sceptical. They are missing a legal framework that would be a first step towards building trust in virtual currencies.
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The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim neither correctness nor accuracy. For detailed information on crypto regulations we recommend contacting a certified legal advisor in the specific country.
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