France Rejects Multiple Cryptocurrency Tax Relief Amendments

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In a significant development for the country's digital asset landscape, France’s National Assembly has rejected several proposed tax law amendments aimed at providing relief to cryptocurrency traders and users. The decisions, made on Monday, underscore the government’s cautious stance toward integrating crypto-friendly policies into the existing fiscal framework.

While some had hoped for a more progressive approach to digital asset taxation, lawmakers maintained that current thresholds and structures remain sufficient. This outcome has sparked debate among crypto advocates, investors, and financial experts about the future of cryptocurrency regulation in one of Europe’s largest economies.

Key Tax Proposals That Were Rejected

The rejected amendments included a range of measures designed to ease the tax burden on individual crypto holders and clarify regulatory ambiguities.

1. Increase in Annual Tax-Free Threshold

One of the most discussed proposals sought to raise the annual tax-free allowance for cryptocurrency gains from €305 (approximately $347) to either €5,000 or €3,000. Proponents argued that such an increase would bring crypto taxation more in line with real-world usage patterns, especially for small-scale traders and everyday users.

However, members of the National Assembly dismissed the idea, stating that “€305 is already quite generous.” They further noted that increasing it tenfold—let alone sixteenfold—would be “particularly excessive” when compared to the tax treatment of traditional securities.

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2. Equal Treatment with Securities

Another amendment aimed to allow capital gains from cryptocurrencies to be taxed under the same conditions as those applied to securities. Currently, crypto assets are subject to a different and often less favorable regime than stocks or bonds.

Lawmakers did not support this equalization effort, maintaining a distinction between traditional financial instruments and decentralized digital assets. Critics of the decision argue that this creates regulatory fragmentation and discourages innovation within France’s fintech sector.

3. Clarification on Regular vs. Occasional Crypto Activity

A proposal to differentiate between professional crypto-related activities and occasional transactions was also turned down. Such a distinction could have allowed casual users to benefit from more favorable tax treatment, shielding them from being classified as de facto traders or businesses.

Without this clarification, there remains uncertainty around how revenue authorities will classify repeated but non-professional trades—potentially exposing individuals to higher compliance risks.

4. Treatment of Capital Losses

An additional rejected measure concerned the recognition of capital losses on cryptocurrency holdings. Under current rules, offsetting crypto losses against gains is limited or unclear in practice.

The proposed amendment aimed to formalize loss deductions similarly to other investment assets. Its rejection means that investors may still face challenges when attempting to claim losses during tax filings.

5. Taxation Triggered Only Upon Withdrawal

Perhaps one of the most technically nuanced proposals involved Article 16a, which suggested that taxation should only occur when cryptocurrency is sold and withdrawn into a bank account—rather than being triggered simply by conversion into fiat currency on an exchange platform.

This change would have reduced tax reporting complexity and aligned better with actual liquidity events. However, it failed to gain parliamentary approval, leaving taxpayers exposed to potential tax liabilities even without accessing cash.

Current Tax Regime Remains Unchanged

Despite these rejections, one notable proposal was absent from Monday’s debate: a plan to impose a flat 30% tax rate on all cryptocurrency transactions. This idea, previously floated as part of Article 16b, remains under consideration but was not included in the current review cycle.

Currently, capital gains on crypto assets are taxed at a combined rate of 36.2%, comprising:

This rate applies regardless of holding period, meaning long-term investors receive no preferential treatment—a point of criticism from industry observers.

For comparison, other non-real estate capital gains (such as those from stocks) are generally taxed at a lower 30% flat rate. As Reuters previously highlighted, this discrepancy places cryptocurrency investors at a relative disadvantage.

In fact, back in 2019, a parliamentary finance committee approved an amendment that would bring crypto sales under the same 30% single-rate system. While that effort showed early momentum, progress has since stalled.

👉 Learn how evolving tax frameworks impact your digital asset strategy across jurisdictions.

Why These Decisions Matter

The rejection of these amendments signals continued hesitation within French legislative circles to fully embrace cryptocurrency as a mainstream financial tool. While innovation in blockchain technology accelerates globally, France’s approach reflects broader European trends of regulatory caution.

Still, the persistence of discussions around tax reform indicates growing recognition of crypto’s economic role. Whether future sessions will revisit these proposals—or introduce new ones—remains to be seen.

Frequently Asked Questions (FAQ)

Q: What is the current tax rate on cryptocurrency gains in France?
A: Cryptocurrency capital gains are taxed at a total rate of 36.2%, made up of 19% income tax and 17.2% social contributions.

Q: Is there a tax-free allowance for crypto gains in France?
A: Yes, individuals can earn up to €305 per year in crypto gains without paying taxes. This threshold was not increased despite recent proposals.

Q: Are crypto capital losses deductible in France?
A: Deductibility is limited and not clearly defined under current rules. The rejected amendment sought to improve this, but no changes have been implemented yet.

Q: How does France tax crypto compared to traditional investments?
A: Crypto is taxed more heavily than most non-real estate investments, which typically face a 30% flat rate instead of 36.2%.

Q: Could France adopt a simpler crypto tax system in the future?
A: A flat 30% tax rate has been proposed before and may resurface. Lawmakers have acknowledged its benefits in terms of simplicity and legal clarity.

Q: When is cryptocurrency considered taxable in France?
A: Gains are typically taxable upon disposal—such as selling for fiat or exchanging for another cryptocurrency—even if funds remain in a digital wallet.

👉 Stay ahead of regulatory changes with real-time insights on global crypto taxation policies.

Conclusion

France’s decision to reject multiple cryptocurrency tax relief amendments highlights the ongoing tension between innovation and regulation. While the government maintains a conservative fiscal position, pressure may grow from both domestic users and international trends toward fairer, simpler digital asset taxation.

As blockchain adoption expands and public interest intensifies, future legislative sessions may offer another opportunity to modernize France’s approach. Until then, investors must navigate a complex landscape—one where clarity remains limited and compliance demands high attention.

For now, stakeholders should closely monitor developments around Article 16b and any renewed efforts to harmonize crypto taxation with broader investment frameworks.

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