How to file your crypto tax return in France?

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Tax filing season can be a stressful time for many, especially for cryptocurrency holders who must navigate the tax complexities associated with these digital assets. In France, legislation has evolved to regulate this new form of capital, making it essential for crypto investors to understand how to properly declare their assets to remain compliant with the tax authorities. This article guides you through the essential steps to file your crypto tax return.

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Understanding cryptocurrency taxation

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The first step is to understand under which tax regime your cryptocurrency gains are taxed. In France, cryptocurrencies are mainly considered digital assets or movable property, which means that gains are subject to capital gains tax. Since 2019, capital gains on cryptocurrency exchanges are taxable at a flat rate of 30%, including social security contributions. This regime applies when you sell your cryptos for euros, use them to buy goods or services, or when you exchange one crypto for another.

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Identify your reporting obligations

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If you sold, used, or exchanged cryptocurrencies during the year, you are required to report these transactions in your tax return. It is crucial to keep a detailed history of all your transactions, including the purchase and sale dates, the euro values at the time of the transactions, and the gains or losses made. To simplify your tax return, you can opt for Waltio , which allows you to download your tax report in a single click.

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When to declare?

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The declaration of income from cryptocurrencies follows the general tax calendar in France, generally between April and June of each year, for income from the previous year.

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How to declare?

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1. Form 2042: You must declare your capital gains on form 2042-C-PRO in the section relating to “Capital gains on miscellaneous assets”.

2. Form 3916-bis: If you have an account on a foreign exchange platform, you must also declare it using form 3916-bis dedicated to digital accounts.

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Calculate your capital gains

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Calculating capital gains is perhaps the trickiest part of the declaration. You must calculate the difference between the sale price and the purchase price of your cryptocurrencies. Here are the steps to follow:

• Sell Price: This is the amount you sold your crypto for. If you traded it, this is the market value of the crypto you acquired at the time of the trade.
• Acquisition price: This is the initial cost of your cryptos, increased by the acquisition fees. The tax authorities offer the possibility of opting for the “weighted average price” regime if you make several transactions during the year. This can simplify the calculation by assigning an average cost to each unit of crypto owned.

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Document and keep your supporting documents

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It is essential to keep all supporting documents of your transactions, including account statements from your exchange platforms, purchase or sale invoices, and bank statements showing fund transfers. These documents may be required in the event of a tax audit.

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Resources and Support

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If you are unsure about how to handle your cryptocurrency transactions or have complex transactions, it may be a good idea to consult a tax expert or accountant who specializes in cryptocurrencies. Online resources, such as dedicated forums and how-to guides, or the Waltio solution as mentioned above, can also be useful.

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Conclusion

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Reporting cryptocurrency capital gains in France can seem complex, but being prepared and understanding the requirements can make the process much simpler. Be sure to stay up-to-date with the latest tax regulations and prepare your documents thoroughly throughout the year. By following these guidelines, you can confidently navigate the cryptocurrency tax landscape and avoid potentially costly mistakes. Transparency and rigor are your best allies when it comes to meeting your tax obligations in France regarding your crypto-asset investments.

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