Longtime bitcoin users are familiar with the difficulties that arise when tax season approaches. While many countries have hefty taxes on cryptocurrencies and their capital gains, France has set the two apart with a 36 percent Bitcoin tax compared to 30 percent on other gains.
Now, however, Senate legislators of the lower house of parliament are backing a proposed plan by the French Finance Committee to bring bitcoin taxes down to the standard 30 percent. As part of the 2019 budget bill, there will be a vote by the rest of parliament before the plan is finalized and put into effect.
One aspect of Bitcoin taxes not addressed, however, is its use as a means of exchange for day-to-day purchases. Many countries have similar laws requiring calculation and reporting of Bitcoin’s use as an actual currency and not just an investment tool.
The implications are harsh for adoption of Bitcoin and other cryptocurrencies by those looking to utilize alternatives to fiat currencies.
Additionally, some individuals are still unhappy with the high tax rate for investment or utilization as currency. Some believe taxes will harm innovation, but legislators disagree.
French Finance Minister Bruno Le Maire has previously supported positive cryptocurrency regulation. By making France a haven and hub for ICOs, he wants to bring wealth and technology to the country.
French economic development plant, Plan d’Action pour la Croissance et la Transformation des Entreprises (PACTE – Action Plan for Business Growth and Transformation) has sections aimed at facilitating ICO funding and growth.
The creation of an “ICO visa,” will grant benefits and access to services from banks and accounting firms without regulatory difficulties, as had been the case. This will foster competition for space in the French economy, benefiting local businesses and citizens.
Simultaneously, the Financial Action Task Force, an intergovernmental agency aimed at preventing money laundering, has its eyes on implementing a new regulatory policy for cryptocurrencies.
At Crypto.IQ, we think the French are showing great foresight regarding cryptocurrency growth. We think a combination of regulation and support will be positive for future industry growth. This proactive approach will give France an advantage in years to come.