Bitcoin is one of the few things that can make tax regulations even more complicated than they are already are thanks to offshore holdings and everyone trying to pay low tax rates. In addition to the tax initiatives in France making headlines, such as the carbon tax that will no longer go into effect, there recently has been debate about Bitcoin and taxes. French lawmakers seem to be in favor of giving those who invest in Bitcoin a tax cut.
The proposal for these tax breaks for Bitcoin investors has already been backed by the lower house of parliament in France, the Assemblée Nationale. This proposal would bring down the taxes on gains from Bitcoin, so they are similar to France’s other capital gains taxes. This is a sharp contrast to the current Bitcoin taxes, as the cryptocurrency is currently taxed around 20 percent more than sales of securities, such as stocks and traditional capital gains. For those interested in specific figures, the tax rate associated with Bitcoin sales is currently over 36 percent. The proposal would bring this down to a flat rate of 30 percent, which is the rate for other capital gains sales.
High-net-worth individuals who invest in Bitcoin would also pay the same tax on purchases made with Bitcoin.
The Good and the Bad
While the tax break for Bitcoin investors would be appreciated as a way to encourage people to adopt the technology, the regressive taxation associated with using Bitcoin for goods and services has less support. Many people feel that this type of regressive taxation will stifle the technology since someone who makes a purchase with Bitcoin will effectively pay more for the item than they would if they were to purchase with cash.
When It Will Be Decided
For this proposal to become official, it must first pass the French general legislative session. It will then be included in the 2019 budget. Those in the know expect this tax initiative to pass since it seems to fit the other policies in France that aim to develop a regulatory and friendly atmosphere for crypto securities.
Those Other Policies on Cryptocurrencies
Bruno Le Maire, the French finance minister, has indicated repeatedly that he would like to make France the European hub for ICOs. This is just part of the French government’s efforts toward revitalizing and modernizing the economy. The Action Plan for Business Growth and Transformation, which is being finalized, also includes some adjustments for the cryptocurrency market as it relates to finance. It will include an ICO visa, which will let French authorities choose eligibility depending on the ICO’s whitepaper. It is designed to let legitimate projects access services from accounting firms and banks, hopefully providing a boost to the economy via ICOs.
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