France Reduces Bitcoin Tax Rates
The high tax on the cryptocurrency income in France was ruined by the Council of State, the highest administrative court in the country. Cryptocurrencies will now be classified as transferable property and by changing the rules in effect since 2014, the tax rate will be reduced from 45 percent to 19 percent for cryptocurrency.
According to Le Monde’s report of 26 April in France, the Council of State reduced the tax rate on cryptocurrency to a fixed 19 percent band from 45 percent.
The Council of State (Conseil d’Etat), the highest auditor in France’s legal administration, explained that Bitcoin’s sales will no longer be classified as non-trade activities, but will be considered “movable property” as valuable materials. On this count, the cryptocurrency will be classified as transferable property and the tax rate will be reduced from 45 percent to 19 percent for cryptocurrencies by changing the rules in force since 2014. However, this new classification of 19 percent applies only to cryptocurrency investments. Income derived from cryptocurrency mining and mining activities related to cryptocurrencies will be included in the old tax class and will continue to be taxed at 45 percent.
This change in the tax rate on the cryptocurrencies was made after citizens, earlier this year, resorted to France’s highest regulatory body to change regulations on cryptocurrency transactions that were in force since July 2014.
In January, the government formed a group led by Jean-Pierre Landau to develop national cryptocurrency regulations to reduce the risk of speculation. In March, the government banned investment companies from engaging in cryptocurrency transactions until the regulations were put into effect. Also in March, it was reported that France’s financial market regulator was looking for legislation that would encourage the development of ICOs. Le Maire wants France to be at the forefront of regulations regarding cryptocurrencies and to be the centre of, in his words, this “cryptocurrency revolution” in blockchain technologies.