On the other hand, exchanges between digital assets are not taxed. So you can exchange BTC for ETH without generating any tax. 💡
At the same time, the obligation to declare foreign bank and financial accounts (e.g. an account in Switzerland) has been extended to digital asset accounts. You must therefore declare each year any accounts opened with platforms that detect digital assets for your foreign account.
In summary, for the 2023 reporting season, you will have to file a declaration in connection with your crypto-currencies:
👉 If you sold crypto-currencies in 2022 (even if you took a capital loss)
👉 Or if you had, in 2022, an account holding crypto-currencies opened abroad
If you made any disposals of digital assets in 2022:
👉 Initially, you will need to complete a specific Schedule No. 2086 return: on this schedule, you will need to fill in all the disposals made during 2022 and specify, for each of them, the completion date, the disposal price and the acquisition price and value of the total portfolio of digital assets on the disposal date.
👉 Secondly, you will need to report the amount of the overall capital gain or loss for the year on the tax return in box 3AN or 3BN.
If in 2022 you held a digital asset account opened with a foreign player, you will have to declare each of these accounts on the annex 3916-bis return, specifying in particular the date the account was opened and the details of the platform concerned.
What's new for the 2023 return?
For this year, there are no substantive changes. 😏
In terms of form, the form for declaring digital asset accounts opened abroad could be simplified to make things easier for taxpayers.
Until now, you had to search for the details of foreign platforms yourself, which could take some time. Now, the tax authorities are offering a pre-selection of popular platforms that you might be likely to use.
Popular foreign platforms to declare include: Bitpanda, Cryptocom, Swissborg, (which are registered with the AMF but have no French subsidiary), but also Bybit, Coinbase or Kraken, etc.
Those you don't have to declare because they have an operational structure in France: Binance, Coinhouse, Meria, Paymium, StackinSat, etc.
Why are foreign platforms declarable?
Digital asset accounts only have to be declared when they are held by a foreign operator because the tax authorities have much broader legal powers to access information held by French operators.
It is therefore easier for them to check the consistency of declarations by corroborating them with third-party information when this information is held by players in France.
Do I also have to declare my accounts if I go through a Revolut-type neo-bank?
Yes, in addition to digital asset accounts, "bank" accounts and "financial" accounts abroad must also be declared.
In fact, the forms for declaring bank/financial accounts (no. 3916) and digital asset accounts (no. 3916-bis) have been merged into form no. 3916-3916-bis.
What tax treatment is reserved for NFTs?
From a purely legal point of view, it is a mistake to treat NFTs as a homogeneous category ❌. This technical tool makes it possible to represent a multitude of rights and offer a wide variety of uses.
Sometimes, they are merely a tool for technically improving the proof of a right.
Sometimes, they are the basis of the value of a purely digital asset. If we want to do things as well as possible, it is therefore necessary to consider the qualification of the NFTs we own on a case-by-case basis in order to determine the applicable tax regime.
If we want to be as practical as possible, several trends may emerge:
1/ NFTs that are merely proof of ownership of a physical asset should not have any tax value as such: we must then consider the tax regime of the underlying asset;
2/ NFTs that represent a digital asset may :
👉 Either fall within the definition of digital assets: in which case, the regime for capital gains on digital assets just outlined applies; for NFTs of game items, for example, which give rise to frequent exchanges of modest value, this seems to be the simplest and most appropriate choice;
👉 Or fall within the definition of art object or collector's item: this case is relatively rare and only concerns NFTs with very specific characteristics; in this case, taxation at the time of transfer is fairly favourable (6.5% of the transfer price or 36.2% of the capital gain) but their purchase in cryptos generates tax on entry (if the NFT is not a digital asset, then the purchase of this NFT in digital assets constitutes a taxable transfer of digital assets used in payment);
👉 Or, failing this, fall into the sweeping category of movable property : In which case, the system for capital gains on movable property applies (36.2% on the capital gain, exemption in the event of disposal less than or equal to €5,000, but taxation on entry as well).
I have tokens representing real estate shares, what should I do?
As with NFTs, tokens representing other assets, particularly real estate, need to be qualified on a case-by-case basis to determine the applicable tax regime.
Generally, real estate tokens represent shares in companies holding the real estate assets.
Depending on the qualification, the income received may therefore be taxed either as dividends or as property income (several tax regimes are likely to apply depending on the taxpayer's situation).
I have earned staking income, how should I treat it in my tax return?
In principle, staking income and all income received in cryptos (lending, mining, etc.) must be declared, up to their value in euros at the time they are received, in respect of the year in which they are received. The tax category differs depending on the nature of the income.
For certain financial income, such as interest, the flat tax at 30% should apply. For others, the non-trading profits sweeper category should apply (progressive scale and social security deductions at 17.2%).
In the event of subsequent disposal of the cryptos received, the regime for disposals of digital assets would find application under the classic conditions.
In practice, it can be particularly complex to track the valuation in euros of all one's gains in digital assets, especially when the rewards are released very gradually.
How can the tax authorities find out that I haven't declared a capital gain?
Tax inspections generally come into play when inconsistencies are detected between the information available to the authorities and the taxpayer's declarations. This may be the case, for example, if a taxpayer fails to declare significant disposals of digital assets in euros.
What do I risk if I fail to declare?
In the event of a tax reassessment, a number of penalties may be applied. These penalties apply to the amount of tax reassessed:
10% in the case of a simple omission; 40% in the case of a failure considered to be deliberate: This is the case when the tax authorities consider that the taxpayer could not have been unaware of his tax obligations; 80% in the case of fraudulent manoeuvres: this is the case when the taxpayer has taken steps to conceal his omission (structures abroad, false declaration, etc.). 80% in the case of fraudulent manoeuvres: this is the case when the taxpayer has taken steps to conceal his omission (structures abroad, false declaration, etc.).Late payment interest of 0.2% per month may also be charged. This interest may be reduced as part of the right to error. What would make me a "professional" investor and what is the associated taxation? The criteria for distinguishing between retail investors and professional traders have recently been clarified 🧐. From now on, an investor is considered to be a professional trader if he carries out his activities in "conditions analogous" to those that characterise an activity carried out by a professional. Thus, not only quantitative aspects (such as the frequency, number and amount of transactions) but also, and ESPECIALLY, qualitative aspects (sophistication of the investment method, hedging of risks, access to insider information, skills and training of the investor, etc.) must be taken into account. An individual investor requalified as a professional trader would see a tax regime applied that is in every way opposed to that of the 30% 'flat tax'. Firstly, taxable income would be calculated differently. All transactions would be taken into account when calculating taxable income, including exchanges between cryptos and including if no transfer in legal tender has been made. Secondly, the income would be subject not to a flat rate of 12.8% but to the progressive scale, with rates ranging from 0% to 45% depending on the amount. Finally, this income could be subject to social security contributions. What changes are planned for next year's return? With regard to income earned from 1 January 2023, which will have to be declared in 2024, two notable changes can be noted: From next year, individual investors will have the option of opting for the progressive income tax scale instead of the flat tax (12.8% tax + 17.2% social security contributions); in practice, this choice will result in tax savings only for households subject to a marginal tax rate of 11% or 0%. Professional traders will be taxed in the non-commercial profits category instead of industrial and commercial profits. Special cases 💡 I have cryptos in Celsius or FTX, how do I adjust my tax return? As you know, the Celsius and FTX platforms are involved in bankruptcy proceedings in the United States. If you are one of the victims, you have two choices: consider these cryptos as lost or hope that you will get them back one day. "When you lose cryptocurrencies on a platform, following a hack or closure, you should deduct their value from your cryptocurrency portfolio, for future disposals," explains Pierre Morizot, co-founder of the start-up Waltio, which provides an assistant to manage your tax return. "In the case of FTX, there is a chance that users will be able to recover all or at least some of their funds at the end of the legal proceedings." 👉 What to do then: "We suggest considering these cryptos as lost, and therefore removing them from the portfolio. Be sure to keep the receipts, in case all or part of the funds are recovered. In that event, the overall amount of the portfolio will have to be readjusted with the reintegration of the funds," he insists. "From a legal point of view, the fact that FTX is in receivership does not allow a loss to be deducted from the cryptos, but from an economic point of view there is a good chance that users will record losses," continues Alexandre Lourimi of ORWL. "The trade-off must be made on the basis of the taxpayer's situation and the proportion of assets that are on the platforms in relation to the overall portfolio," he points out. To put it plainly, if this concerns a very large part of your crypto assets, it is better not to declare them as "lost" until you know how much you will be able to recover. The tax authorities could see this as a way of evading tax... I received cryptos as part of an airdrop, how do I declare them? If you're an advanced user, you probably went on the hunt for airdrops last year, i.e. you received cryptos for free from a project. 👉 How do you declare them? "The subject is complex, as it is not a genuine interest in the legal sense," notes Pierre Morizot. "We recommend no taxation if the gain was not anticipated, as in the case of a surprise airdrop, but it is taxed under the non-commercial profits regime if the airdrop was paid in return for an action (use of a protocol, registration, etc.)." Pierre Morizot points out that there is no case law on the subject. He also points out that given that there are often actions to be carried out in order to benefit from an airdrop, then taxation seems to be the default regime. 
