Crypto Assets, Bitcoin: What About Taxing Capital Gains?

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Cryptocurrencies never stop talking about them. It must be said that in a few years they have moved from curiosities reserved for geeks and exposed by anti-systems, to financial assets cited by employees on Wall Street, and on their way to being a means of payment with the initiatives each other to be from Paypal or Facebook. Despite everything, they remain financial assets that are valued by investors for the value-added potential they represent, as important as the risk that characterizes them.

Nevertheless, in the last few years and even in the last few months, more and more people have positioned themselves on virtual currencies. The profits can be substantial, but too often we forget that they are also taxed. What is the taxation of crypto assets? How much does the slate cost? How to calculate the tax How do you declare your earnings in crypto assets? All of our declarations!

What taxation for digital assets?

What taxation for digital assets?

The Finance Act of 2019 revolutionized the taxation of cryptocurrencies. Formerly considered and taxed as conventional transferable securities, virtual currencies are now subject to a separate tax, a « digital asset » tax. In fact, it has only been mandatory for the French to calculate and disclose their taxable profits from crypto assets since January 1, 2019. Hence, since that date, individuals have been taxed on the profits made from the occasional purchase and resale of digital assets. Prior to that date, cryptocurrencies were considered movable assets and were therefore taxed, namely a capital gains tax of 36.2% that was levied on every sale.

The new regime is subject to Article 150 VH bis of the general tax legislation. It provides a 30% tax (flat rate) on total capital gains from digital assets or an income tax scale of 17.2% social security contributions if that’s more convenient for you. The taxation of cryptocurrencies thus corresponds to the taxation of capital gains and is similar to the taxation of capital gains on transferable securities.

There is a transfer allowance of 305 euros per year and if the taxpayer has posted a capital gain of that amount or less, the individual is not required to disclose his capital gain.

Virtual Currency Taxation: What’s the Bill?

Virtual Currency Taxation: What's the Bill?

All digital wallets are affected by this taxation of crypto assets and the individual must take into account all wallets held on all platforms used, as well as all cryptocurrencies that have been combined, owned and exchanged during the year in order to calculate total capital gains . Indeed, the taxpayer must determine the amount of his capital gain or capital loss for any taxable transaction, if necessary, by referring to websites that offer the history of quotes of various cryptocurrencies, such as Coinmarketcap. The next step is to calculate profits by adding up the capital gains and losses realized over the year for each taxable transaction.

By taxable transaction we mean the transfer of a digital asset for an asset other than digital. Transactions are therefore taxable when you exchange virtual currency for traditional currency. For example, when you exchange Bitcoin for a sum in euros or dollars. If, on the other hand, you exchange Bitcoin for Ether or Litecoins, the transaction is not taxable. This means that you will not be taxed for this transaction and you will not have to declare it.

Please note that capital losses are not eligible for any other benefit. It is not possible to deduct a capital loss on digital assets from other income or carry it over to the following year.

Crypto Assets: How To Report Your Earnings With The Tax Authorities?

Crypto Assets: How To Report Your Earnings With The Tax Authorities?

The declaration of capital gains from digital assets must be sent at the same time as the income tax return. A special field is provided in the income tax return for this purpose. It is known as « capital gain or loss from digital assets ».

The taxpayer must also attach an annex listing all the taxable transactions carried out during the year in question: Form 2086.

Note: The obligation to report accounts on websites and platforms domiciled abroad such as CoinBase, Kraken, Binance, etc. via the 3916 Bis form, which you can find in your personal tax returns section in the « Additional declarations » section. Please note that this declaration of accounts held abroad is mandatory even if your accounts are empty. It is mandatory to declare all accounts in which you hold cryptocurrencies, even if they do not allow conversion into traditional currencies.

Which crypto in 2021?

Surname, surname Market capitalization Number in circulation
Ethereum (ETH) + 134 billion euros 114 M.
Ripple (XRP) + 10.3 billion euros 45.4 billion
Bitcoin Cash (BCH) over EUR 6.9 billion 18.6 M.
Tether (USDT) more than 50.5 billion euros 24 billion

Which cryptocurrency to buy in 2020?

6 cryptocurrencies to buy for 2020 and beyond

  • Bitcoin (BTC) First of all, I’m not going to be original, but rather efficient. …
  • Basic Attention Token (BAT) The success of Basic Attention Token never fluctuates month after month. …
  • Enjin Coin (ENJ) …
  • Binance Coin (BNB) …
  • Nexo (NEXO) …
  • Ethereum (ETH)

Which crypto should you buy in 2020?

In our opinion, the most promising cryptocurrencies for 2020 and in the coming years are the Tezos (XTZ), the Stellar Lumens (XLM) and the ChainLink (LINK), whose prices have risen sharply in recent months.

Which cryptocurrency will explode?

Cryptocurrency Price ($) Variation over the year
Bitcoin (BTC) 7.539 + 96.16%
Ethereum (ETH) 132.9 – 5.62%
Ripple (XRP) 0.19 – 46.39%
Litecoin (LTC) 42.3 + 32.29%

How do I declare a crypto account?

The declaration is made using form no. 3916-bis. The form, duly completed and signed, will be sent by secure message through the personal area of ​​the impots.gouv.fr website. The declaration can also be sent on paper.

How do I explain my actions?

Regardless of whether you opt for the PFU or the scale, you must indicate the amount of dividends from shares (but also shares) in field 2DC of your main income tax return (Form 2042). This field is known as “Income from stocks and shares”.

How do I declare Bitcoin Gain?

To report total capital gain, the taxpayer must fill out two specific forms: Form No. 2086 and Form No. 2042C. Taxpayers who own digital assets overseas (Kraken, Binance, Coin Base, Bitfinex, Btstamp, etc.) should complete Form No. 3916 Bis.

How do I register a Revolut account for taxes?

If you are completing your declaration on paper, tick the 8UU check box in the « Miscellaneous » section and attach the attachment form 3916 to your declaration (you can download it here), in which you have provided your account details as explained above.

How to Calculate Bitcoin Profit

The calculation is not particularly complex. We have two pieces of information: 1 BTC = 8000 u20ac and 1 BTC = 10,000 u20ac. You buy for 500 BTC at the time of the price at 8000 A / A which gives you this: 500/8000 = 0.0625, which is 0.0625 BTC.

How do you calculate your trading profits?

Calculating Profit With a lot of 100,000, a buy at 1.25637 and a resell at 1.27637: that’s 200 pips. 1 pip is worth (we do the calculation during the sale): 0.0001 * 100,000 / 1.27637 = 7.83 euros. The profit is therefore 200 * 7.83 euros = 1,566.94 euros.

How do I convert cryptocurrency to euros?

The first: you can use the Coinbase site which allows you to exchange cryptocurrencies with each other or for other currencies. All you have to do is send your ETH and then exchange it for euros and then transfer it to your account via bank transfer.

How do I declare a Coinbase account?

In short, if you have an account with Coinbase, whether funded or not, you will need to complete Appendix No. 3916 of the Income Tax Return Form, which relates to bank accounts opened abroad (see instructions for online use).

How do I buy bitcoins?

and more intuitive brokers (Coinbase, Coinhouse, etc.). The latter are usually easier to use, but are more expensive. There are also some physical counters in Paris (Coinhouse), Caen (Bitcoin Avenue), Brest (Byzantine) or Bordeaux (Comptoir des Cybermonnaies).

How do I fill out Schedule 3916?

When you reach the “Miscellaneous” section of the declaration, activate the 8UU check box. Click Next, select Attachment 3916 on the left side of the screen, and complete the number of accounts to report. Second step: You have to fill out Appendix 3916.

How do I fill out Form 3916 online?

Online declaration Click on « Appendix No. 3916 » on the left. The red boxed question “How many accounts outside of France would you like to log in?” Will appear. Enter « 1 » if N26 is the only account that you opened abroad in the previous year.

Crypto Assets, Bitcoin: What About Taxing Capital Gains?
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