Cryptocurrency: You Will Pay Less Taxes On “Small” Gains

Cryptocurrency

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”.

Ruth Karpenter

Ruth is the senior contributor to Weird News Ledger, and can’t really think of a better job than one that lets her read and write interesting stories on everything from aliens and asteroids to Bigfoot and the Loch Ness Monster. Ruth previously worked in magazines at Transcontinental Media and headed up the lifestyle department at Sun Media. Her Twitter bio describes her as a “reader, writer, eater,, fancy geek, summer cyclist,” which pretty much sums up how she spends her time outside of work.

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