This is news that should interest you if you have an electronic wallet of cryptocurrencies. The Council of State, France’s highest public institution in terms of jurisdiction, has published a decision in which it details the evolution of taxation in terms of profits from the sale of virtual currencies.
A classification deemed obsolete
The first major change imposed by the Council of State concerns the classification of bitcoin and other cryptocurrencies, considered unsuitable for current practices.
Until now, virtual currencies have been taxed through income taxes as non-commercial profits (NBCs), in the case of casual activity, and as industrial and commercial profits (BIC) for more regular activities. The main difference is a heavier imposition for BICs.
In either case, the tax is based on income tax (ranging from 0 to 45%) and subject to the generalized social contribution (CSG) of 17.2%.
New class, new taxation
Henceforth, there is no NBC or BIC, but rather a classification under the label “capital gain of movable property”, in the majority of cases. This leads to a lighter taxation since it is now 19%, only for sales above 5,000 euros. Although still subject to the CSG, this new taxation becomes more interesting, especially for “small” sales below € 5,000, which are therefore not imposed as a capital gain.
The Council of State specifies, however, that there are exceptions in which sales of virtual currencies will always be imposed as BNC or BIC.
BNC will be considered to be earnings that “do not constitute a capital gain resulting from an investment transaction but are the counterpart of the taxpayer’s participation in the creation or operation [of the cryptocurrency]”, such as mining.
BIC will be considered to be profits that “[take] the form of an exchange for another movable property, under conditions characterizing the exercise of a commercial profession”.