According to a French news website, France’s lower house of parliament (Assemblée Nationale) has backed a proposed plan from its finance commission which will effectively bring the taxes on bitcoin gains in line with other capital gains taxes in the country. At present, bitcoin sales are taxed about 20 percent more than traditional capital gains or sales of stocks and other securities.
The bill is spearheaded by Eric Woerth, the body’s finance committee chairman. It effectively brings the tax rate for bitcoin sales from more than 36 percent to the flat 30 percent that other capital gains sales pay. It was, however, not enough for some French citizens, one of whom said that the previous and proposed taxes both inhibit innovation.
Il aurait fallu et oser faire comme les autres pays européens, si vous voulez attirer les investisseurs. Au pire 11.5% était très bien.
Il ne faudra pas vous étonner de rater le virage de la blockchain comme ce fût le cas de l’internet. Trop de taxe tue l’économie du pays.
— Thysdrus (@Thysdrus1) November 7, 2018
Tax Also Applies to Bitcoin Purchases
According to French outlet Le Figaro, the tax would not only apply to strict sales of bitcoin such as using LocalBitcoins or Coinbase to realize profits but would also apply to using bitcoin to buy things, e.g., when “used as a means of payment for acquisition of goods or services.”
France is far from the only jurisdiction to tax bitcoin in this way, but the regressive method of taxation arguably stifles a technology that securely provides citizens of said jurisdictions a secure and powerful way to shop. More to the point, when a person uses bitcoin to purchase a product they are not getting real-world value in the same way as a regular market sale of coin — they cannot immediately turn around and re-invest if the market takes a dive, for example, as is the strategy of many bitcoin investors which generates a lot of taxes.
The tax reduction plan must pass the general legislative session and be included in the 2019 budget to become official, but it is in line with other moves on the part of France’s government to attempt to create a more friendly regulatory environment for cryptosecurities.
PACTE to Create Complete Regulatory Framework for ICOs and Cryptocurrencies
French Finance Minister Bruno Le Maire has been vocal on the subject of cryptos and his desire to make France the leading hub for ICOs in Europe. His support is one of many prongs in the financial wing of the French government’s effort to modernize and revitalize the French economy, in part with crypto investors.
In a recent interview, French treasury official Sebastien Raspiller said:
“Blockchain provides very promising avenues for innovation, including in the financial sector, and France was one of the first countries to adapt its legislative framework to explicitly allow the use of blockchain.
“In 2017, the challenges and opportunities raised by ICOs and crypto-assets became a more pressing issue. Given the potentially strategic nature of this question, the Minister decided to launch a mission on this topic, which was led by former deputy-Governor of the French central Bank, Jean-Pierre Landau.”
The government is currently finalizing a broad plan for economic development which is dubbed, in English, the Action Plan for Business Growth and Transformation, which includes a number of important changes for the crypto market. Specifically, it will include the creation of an “ICO visa,” which French authorities will determine eligibility for based on the submission of an ICO’s whitepaper. According to a previous CCN article on the subject:
“The visa excludes foreign corporations in an attempt to attract more projects to incorporate within the French nation. The new ICO visa will enable legitimate projects to more easily access services from banks and accounting firms, which to date has been difficult due to the regulatory uncertainty in the sector.”
Ultimately, many in the blockchain sector will agree that France is moving in the right direction. Friendly regulations are better than harsh ones, and occasionally a complete lack of regulation can open the door to limitless prosecution and tepidness on the part of would-be cryptonaughts who fear unknown consequences to trafficking in cryptos.
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