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April 30, 2024

How to file your crypto tax declaration in France?

The tax declaration period is often a source of stress for many, especially for cryptocurrency holders who must navigate the tax complexities associated with these digital assets. In France, legislation has evolved to regulate this new form of capital, making it essential for crypto investors to understand how to properly declare their assets to remain compliant with the tax authorities. This article guides you through the essential steps to file your crypto tax declaration.

Understanding cryptocurrency taxation

The first step is to understand under which tax regime your cryptocurrency gains are taxed. In France, cryptocurrencies are primarily considered as digital assets or movable property, implying that gains are subject to capital gains tax. Since 2019, capital gains from cryptocurrency exchanges are taxable at a flat rate of 30%, including social security contributions. This regime applies when you sell your cryptos for euros, use them to purchase goods or services, or exchange one cryptocurrency for another.

Identifying your reporting obligations

If you have sold, used, or exchanged cryptocurrencies during the year, you are required to report these transactions in your income tax return. It is crucial to keep detailed records of all your transactions, including purchase and sale dates, euro values at the time of transactions, and realized gains or losses. To simplify your tax declaration, you can opt for Waltio, which allows you to download your tax report with a single click.

When to file?

The declaration of income from cryptocurrencies follows the general tax schedule in France, usually between April and June of each year, for income earned in the previous year.

How to file?

  1. Form 2042: You must declare your capital gains on Form 2042-C-PRO in the section related to "Capital gains on various properties."
  2. Form 3916-bis: If you have an account on a foreign exchange platform, you must also declare it using Form 3916-bis dedicated to digital accounts.

Calculating your capital gains

Calculating capital gains may be the most challenging part of the declaration. You need to calculate the difference between the selling price and the acquisition price of your cryptocurrencies. Here are the steps to follow:

Documenting and retaining your evidence

It is essential to retain all evidence of your transactions, including account statements from your exchange platforms, purchase or sale invoices, and bank statements indicating fund transfers. These documents may be required in the event of a tax audit.

Resources and assistance

If you are uncertain about how to treat your cryptocurrency transactions or if you have complex transactions, it may be wise to consult a tax expert or an accountant specializing in cryptocurrencies. Online resources, such as dedicated forums and practical guides, or the Waltio solution as mentioned earlier, can also be helpful.

Conclusion

Filing cryptocurrency capital gains in France may seem complex, but clear preparation and understanding of the requirements can greatly simplify the process. Ensure that you stay informed about the latest tax regulations and carefully prepare your documents throughout the year. By following these guidelines, you can confidently navigate the cryptocurrency tax landscape and avoid potentially costly mistakes. Transparency and diligence are your best allies in meeting tax obligations in France regarding your crypto investments.

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