During a National Assembly session in France this week, the floor rejected amendments to a number of crypto tax bills, leaving the French crypto economy floundering. France is already under extreme pressure after a series of protests and riots, and these decisions from the National Assembly is only going to cause more trouble in the country. However, there is some good news from the session, as of January 1st 2019, crypto activity will be charged at a flat rate of 30% rather than at 2018’s flat rate of 35%.
Miners and Traders in the Same Boat
It had been proposed that miners and traders pay a different rate of tax due to the nature of each party. If the amendment was passed, miners would pay less as it’s considered a business activity, while trading is still for personal gains. However, Richard Ferrand – the President of the French National Assembly – voted against the motion due to his lack of specialist knowledge and did not feel it fair to pass amendments without further information.
While this decision will hurt French miners in the short term, Ferrand made the right decision. It’s always best to make an informed decision, especially when it comes to people’s livelihoods. Making the decision for the wrong reasons could weaken France’s integrity as a crypto regulated country
Tax Deductions for Blockchain Firms
In a bid to drive blockchain firms to France and build the French crypto industry, it was proposed that firms operating in the blockchain and crypto industry be given up to €5,000 worth of tax deductions as an incentive. Another motion directly opposed this and wanted to raise the minimum payable tax bracket to €3,000. This amendment conflict meant that both parties have to go back to the drawing board as the motion was denied.
Tax Still Payable on Sale of Cryptos
An amendment was proposed to make tax payable on crypto activity when purchasing cryptos. This would mean that capital loss rules don’t impact crypto assets come tax time. Taxes would be payable at the set rate whether you received crypto as a gift, wage from mining, or work. However, the motion was declined due to Ferrand’s lack of crypto expertise, as he wished to learn more before making a decision.
Finally, Some Good News
As the session continued, we finally got a slice of good news. A motion was suggested to lower the flat crypto tax rate to 20% in order to help develop France’s crypto economy. Yet, this was seen as too low by other National Assembly members and the motion was adjusted. From January 1st 2019, crypto will be taxed at a flat rate of 30%. While it’s not as good as it could have been, it’s better than the 60% a bunch of clickbait fake news sites are reporting.
It was hoped France would build upon its great ICO regulatory framework that it laid down in September, but unfortunately it wasn’t crypto’s day. Thankfully, US citizens have a handy app to calculate their crypto taxes, perhaps it’s about time France got one too, especially after these proposals to change tax law on crypto activity. It’s not over for crypto friendly taxes in France, there is a good chance at the next session we could see some positive news from Ferrand.
You can watch the entire session on crypto taxes below, but if your French isn’t up to scratch it could get confusing very quickly – you’ve been warned.