How to file a crypto tax return in France?

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The tax filing period is often a source of stress for many, especially for cryptocurrency holders who have to navigate the tax complexities associated with these digital assets. In France, legislation has evolved to frame this new form of capital, making it essential for crypto investors to understand how to properly report their assets to remain in compliance with tax authorities. This article takes you through the essential steps for filing your crypto tax return.

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Understanding cryptocurrency taxation

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

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Identify your reporting obligations

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

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When to report?

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

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How do I report?

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1. Form 2042: You must declare your capital gains on form 2042-C-PRO in the section relating to “Capital gains on various assets”.

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.

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Calculate your capital gains

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Calculating capital gains is perhaps the trickiest part of reporting. You need to calculate the difference between the sale price and the purchase price of your cryptocurrencies. Here are the steps to follow:

• Transfer price: This is the amount for which you sold your cryptos. If you traded them, this is the market value of the crypto acquired at the time of the exchange.
• Acquisition price: This is the initial cost of your cryptos, plus acquisition fees. The tax authorities offer the possibility of opting for the “weighted average price” regime if you make several transactions during the year. This can simplify the calculation by assigning an average cost to each unit of crypto owned.

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Document and keep your supporting documents

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

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Resources and support

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If you are unsure about how to handle your cryptocurrency transactions or if you have complex transactions, it may be a good idea to consult a tax expert or accountant who specializes in cryptocurrencies. Online resources, such as dedicated forums and practical guides or the Waltio solution as mentioned above, can also be useful.

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Conclusion

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Reporting cryptocurrency capital gains in France may seem complex, but clear preparation and understanding of the requirements can greatly simplify the process. Make sure you stay up to date with the latest tax regulations and prepare your paperwork thoroughly throughout the year. By following these guidelines, you can confidently navigate the cryptocurrency tax landscape and avoid potentially costly mistakes. Transparency and rigor are your best allies in dealing with tax obligations in France concerning your investments in cryptoassets.

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