The State Council will decide on April 26 on the tax treatment of gains made on cryptocurrencies. It could subject these gains to a flat rate of 19% instead of 45%.
Before making his 2017 tax return, the French taxpayer who made gains by selling bitcoins has an interest in waiting. Because taxation could quickly change. Today, a bitcoin holder with a capital gain can be taxed up to 65%. Tomorrow, it could only be 40%.
A flat rate of 19% against 45%
The Conseil d'Etat was appealed by the law firm Bornhauser, at the request of its clients, so that the tax treatment of gains made on cryptocurrencies be changed. Today, due to a 2014 tax instruction, capital gains generated occasionally by the sale of bitcoin are taxed in the "BNC" category, ie Non-Commercial Profits. They are therefore taxed as part of the 45% marginal income tax. At this rate are added social contributions (15.5 or 17.2%) and in some cases the exceptional contribution on high incomes (3 or 4%).
In front of the Council of State on April 11, Nicolas Canetti, a partner at Bornhauser, argued that gains on bitcoin fall under the regime of capital gains on disposals of movable property. If this were the case, the latter would be taxed at a flat rate of 19% (instead of 45% of the NCBs). A movable property is defined in the civil code, as opposed to the real estate.
The Public Rapporteur in favor of recourse
The decision of the Council of State is expected by 26 April. Importantly, during the hearing, the public rapporteur, charged with examining the case on the basis of the law, was in favor of the appeal, believing that the gains from the sale of bitcoin should come under the capital gains tax regime. on movable property.
If the Council of State agreed to this opinion, the bitcoin taxation would be lightened. Taxpayers who realized capital gains for 2017 will have to regularize their situation. Because the flat tax at 19% does not fall under the usual annual income declaration, which must be subscribed in the year following the transfer, but a specific declaration. The latter must be deposited with the tax department. It must be accompanied by the spontaneous settlement of the tax, within a month of the transfer.