Tax is an obligation to every citizen, but sometimes the burden becomes too heavy to carry, especially if you are running against the bigwigs in the industry. This is what has been bothering amateur cryptocurrency investors in France as they have hitherto been weighed down by excessive tax burdens on their crypto businesses.
However, this is now coming to an end, thanks to recent reports that the country is planning to cut taxes for retail crypto traders. According to a report from the French Council of State, a body mandated to advise the government on legal aspects while at the same time acting as the supreme court on matters administrative, the profits that result from crypto sales should be deemed capital gains of movable property. This is a move that will see the tax that has hitherto been imposed in this instance, drop significantly.
Unfair Categorization To Blame?
At the moment, profits that result from trading in cryptocurrency are treated as industrial and commercial profits, while those that result from occasional transactions are sees as non-commercial profits.
This basically means that the tax levied on crypto profits may go up as high as 45 percent for higher-band taxpayers. This will be in addition to the centralized social distribution (CSG) method of 17.2 percent for the country. By classifying crypto profits as movable property however, this will mean a flat CGT liability of 19 percent plus CSG.
According to a report from Le Monde, the state council noted that certain transaction types may fall under provisions that relate to other forms of income; and that the gains from mining of cryptocurrency and commercial activities that go hand in hand with the technology will still face taxation at the BIC rate. This move came hot on the heels of a case taken by several investors to the supreme court in relation to the harsh tax regime.
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What do you think about France’s move to cut the tax rate for amateur crypto traders? Could this spur more growth in the industry? Let us know your views in the comments section below.