French economy minister Bruno Le Maire today revealed a number of tax amendments designed to benefit cryptocurrency traders, allowing them to acquaint themselves with the legal provisions that govern the accounting procedures and tax obligations related to the activity.
A report by Bloomberg Tax, quoted recently by crypto outlets whose interpretation was then copied by mainstream media, says the latest clarification concerns crypto-to-crypto transactions, which the French minister says will remain tax-exempt.
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Another amendment that could gain support was one to allow crypto-related capital gains to be taxed only when digital assets are sold for fiat or used to buy something else, instead of taxing them based on their values converted into fiat on crypto exchanges.
“We believe that the moment the gains are converted into traditional money is the right time to assess tax, By the same logic, value-added tax will only be assessed when a cryptocurrency asset is used to acquire an asset or a service,” Le Maire said.
Crypto-related firms voluntarily abide by standards on capital requirements and consumer protection and pay tax in France, in exchange for approval from the nation’s regulator.
France establishes first crypto framework
Earlier in April, France enacted the country’s first regulatory framework governing crypto-asset intermediaries. The French parliament passed a bill that will allow for cryptocurrencies to be recognized in the country while ensuring authorities can tax profits generated by the operators and investors in the sector.
The bill requires cryptocurrency exchanges as well as custodian providers to undergo a mandatory AMF registration and obtain a certification to be granted by the French watchdog.
The new framework also comes with hefty fines for those who fail to comply, but will not reimburse investors for their losses as it happens with compensation funds that cover traditional investments.
However, France wasn’t the first European nation to tax crypto revenues, as Spain also applies taxes to cryptocurrencies transactions, and its residents must disclose any profit obtained from these activities.