France has more than halved its cryptocurrency income tax rate on capital gains, incentivizing citizens to invest and even take some profits in the market.
The French Council of State has decided to change the classification of cryptocurrency capital gains, thereby lowering the tax rate from as high as 45% to a flat rate of 19%, a French online publication revealed. With the added generalized social contribution (GSC) for most incomes, the tax rate would rise but still falls well below the 40% threshold.
The revision couldn’t come at a better time for cryptocurrency investors, with bitcoin trading comfortably above $9,000 and the other top 10 coins also in the green today.
France’s highest court for administration, the Council of State, determined that cryptocurrency profits are considered “moveable property” and therefore subject to a lower tax rate than had previously been imposed, rewriting rules that had been in place since 2014.
Prior to the ruling, cryptocurrency gains were identified as either industrial and commercial profits or non-commercial profits, the local French report explained. Under this classification system, the capital gains tax for cryptocurrencies was 45% at the high end for residents in the highest tax bracket.
With the new classification as “movable property,” cryptocurrency profits become more akin to assets that can be transported, such as vehicles, planes and precious metals as well as intellectual property. This category attaches a more attractive flat 19% tax rate for transferring cryptocurrencies.
Before you pack your bags and head for France, there are some exceptions to the new rule. For instance, profits generated by the process of bitcoin mining remain subject to the original tax rate. The lower rate is specifically designed for investment gains.
France Finance Minister Bruno Le Maire was one of the officials to call for cryptocurrencies to be on the agenda at the G20 meeting held earlier this year. Le Maire has grown progressively accepting of bitcoin and other digital currencies seemingly in light of the country’s leadership position for fintech more broadly.
He intends for France to take the lead with regulation in what he recently described as the “cryptocurrency revolution” and for the country to be a hotbed for blockchain innovation including licensed and non-licensed ICOs.
As CCN previously reported, French President Emmanuel Macron appears to have embraced bitcoin, as evidenced by a photo of him holding a bitcoin hardware wallet.
Last year, France gave the green light to banks to support trading of unlisted securities using blockchain technology.