The Council of State, in a decision published on April 26, reviewed the tax regime of bitcoin and, by extension, other cryptocurrencies. For the highest administrative jurisdiction, virtual currencies must follow another type of taxation. But it is not systematic.
Do you have an electronic wallet in which you have bitcoins? Good news ! The tax regime that applies to the gains you get if you give away electronic money for hard currency has just changed significantly. In fact, the Council of State, in a decision published on April 26, reclassified these virtual currencies.
Until now, cryptocurrencies were taxed in the context of income tax as non-commercial profit (NBC) if the activity of purchase-resale in euros is occasional, and as industrial and commercial profit (BIC ) if it is a regular activity. The tax regime is the same, but the accounting requirements are higher in BIC.
For the Council of State, this classification is incorrect . It is better to link them to another category, that of the capital gains of movable property . The decision of the highest French administrative court, however, has a downside : ” certain circumstances specific to the transfer transaction may imply that cryptocurrencies fall under provisions relating to other categories of income .”
Under the BIC and the NLC, the tax rate is based on income tax ( ranges from 0 to 45% ). Added to this is the generalized social contribution (CSG), whose social security contribution rate is 17.2% . This applies to gains from income from assets (which includes BICs and NBCs ) and from investments (this includes notably capital gains).
With the reclassification of the Conseil d’État, bitcoin taxation is relatively lightenedsince the tax regime for capital gains on the sale of movable property includes a rate of 19% , if the transfer price is higher than € 5,000. . Also, depending on the case, it is more advantageous to benefit from the capital gains taxation system, even if the CSG is taken into account.
That being said, the Conseil d’État specifies in its decision that there are circumstances in which the classification chosen by the administration, namely the BIC or the BNC, remains relevant.
Thus, the gains obtained by a cryptocurrency may fall into the category of non-commercial profits ” if they do not constitute a capital gain resulting from an investment transaction, but are the counterpart of the taxpayer’s participation in the creation or operation [of cryptomonnaie] , “writes the instance at the top of the administrative hierarchy.