In a significant move to revise the tax landscape for cryptocurrency, France’s National Assembly Finance Committee recently approved amendments aimed at tightening regulations for crypto holders. This action comes as lawmakers seek to address perceived gaps in the existing tax framework.
The committee’s proposals include an exit tax that would apply to individuals whose crypto holdings exceed €800,000 when they decide to relocate their tax residence abroad. This measure is set to come into effect on January 1, 2027.
Additionally, a proposed tax on crypto-to-stablecoin swaps would treat such transactions as taxable sales, introducing a new layer of taxation for crypto investors.
Details of the Proposed Exit Tax
The exit tax amendment, sponsored by lawmaker Nicolas Sansu and backed by 16 co-signers, builds on article 167 bis of the French tax code—the same provision that governs taxation on stock holdings. Under this amendment, individuals must have been French tax residents for at least six of the past ten years and must possess crypto assets valued over €800,000 at the time of their departure.
Taxpayers would be required to declare all crypto holdings, including those held in self-custody wallets or abroad. However, swaps between different cryptocurrencies without cash involvement would not be classified as taxable sales under this rule.
Understanding the Stablecoin Swap Tax
The second amendment focuses on transactions involving stablecoins, which are cryptocurrencies pegged to fiat currencies like the euro or dollar. Currently, converting crypto to a stablecoin does not incur tax liabilities. However, if the amendments pass, such swaps will be treated as taxable sales starting January 1, 2027, with gains calculated based on the original purchase price.
These tax implications would apply to tokens defined under the EU’s Markets in Crypto-Assets (MiCA) regulation. Importantly, the amendment does not introduce a new tax rate; rather, it aligns with France’s existing flat tax rate, which has increased to 31.4% this year.
Another noteworthy amendment, proposed by lawmaker Daniel Labaronne, would permit crypto investors to carry forward losses for up to ten years to offset future gains, similar to the current provisions available for stock investors.
However, it is essential to note that these proposed changes are not yet law. On October 10, the Finance Committee voted against the entire budget revenue section, leading to the rejection of the amendments as they currently stand. This means that the full Assembly will revert to the government’s original budget text, which does not include the proposed crypto measures.
Lawmakers advocating for these taxes will need to reintroduce the amendments when the floor debate commences on October 13. A crucial vote is scheduled for October 20. If approved, the new tax rules could come into effect starting January 1, 2027, radically reshaping the taxation landscape for crypto holders in France.
