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Thailand Crypto Tax Guide 2024
Tax Filings
Curious about crypto taxes in Thailand? Explore the comprehensive guide, from legalities to tracking transactions. Discover how to navigate the evolving tax landscape.
Curious about crypto taxes in Thailand? Explore the comprehensive guide, from legalities to tracking transactions. Discover how to navigate the evolving tax landscape.
Wondering How to Navigate Crypto Taxes in South Africa? Read our detailed guide on South African Crypto Taxes!
Curious about crypto taxation in Luxembourg for 2023? Our guide covers everything you need to know about crypto taxation in Luxembourg.
Whether you invest in tokens, stake them, mine them, or use them as a currency, the DGFiP (Direction Générale des Finances Publiques) would require some answers from you along with the taxes. France took a positive stance on crypto assets to transform the country into a European crypto hub, but owing to the inherent volatility of the unregulated market, the tax authorities had to come up with an intelligent tax structure to avoid its misuse.
If you are a French resident, you will have to pay taxes on your crypto investments and while the subject of crypto taxes is an intimidating one, we have curated an east-to-read and easier-to-digest crypto tax guide for you, so that when you’re done reading this guide, you can easily file crypto taxes yourself.
People often mistake the decentralised nature of blockchains and dependent cryptocurrencies for anonymity, which is not accurate. Your crypto transactions can be tracked using decentralised tools and your KYC details that you might’ve shared with your crypto exchange when you started using it.
France being a member EU state comes under the jurisdiction of regulatory guidelines and directives like the European Union's Sixth Anti-Money Laundering Directive (AMLD 6), which calls for stricter KYC regulations for companies offering crypto-related financial services in the region.
A new EU directive called Dac8 is expected to come into force later this year. It would give DGFiP the power to verify crypto ownership and access the accounts of crypto businesses to examine their digital assets.
So we suggest reporting all your transactions on your tax return and paying your crypto taxes on time because tax evasion can result in a penalty of 80% of the taxes owed, along with a maximum fine of €500,000 and a prison sentence of up to 5 years in France.
The legal definition of Bitcoin and other crypto assets came into the picture as late as May 9, 2019, under PACTE (Action Plan for Business Growth and Transformation law). The definition constitutes:
“Any digital representation of a security which is not issued or guaranteed by a central bank or by a public authority, which is not necessarily attached to a currency having legal tender and which does not have the legal status of a currency, but which is accepted by natural or legal persons as a medium of exchange and which can be transferred, stored or exchanged electronically.”
Crypto is taxed as an immovable property or asset in France and its disposal constitutes a capital gains event. The gains are subjected to capital gains tax, mining rewards that are subjected to BMC in France.
According to Art. 150 VH of the French General Tax Code, the taxation of crypto capital gains depends on whether the cryptocurrency was acquired from investments orother activities such as mining.
The amount of taxes you pay depends on how you’re viewed from a tax perspective. Investors are usually considered occasional traders and are required to pay the PFU (Prélèvement Forfaitaire Unique) at a flat tax rate of 30% which constitutes a 12.8% Income Tax plus a 17.2% social security contribution.
However, you can opt to waive the 12.8% income tax and choose a progressive tax under the new guidance.
Any income made by professional traders was considered commercial income (BIC (Bénéfices Industriels et Commerciaux) under the previous guidelines, however, things have changed owing to the new guidelines. Income made by professional traders is now viewed as a non-commercial income (Bénéfices non-Commerciaux) and is subjected to non-commercial profits tax.
Since the taxation of your gains depends heavily on how you’re viewed by the DGFiP, we will look at how the tax authority differentiates between the two and the tax implications for both.
The classification used to be on whether you engage in transactions frequently or not. If you were engaged in frequent transactions you were considered a professional trader attracting a progressive commercial profit tax varying between 0-45% and if you weren’t so active and engaged in just frequent transactions, you were considered an occasional trader and attracted a flat PFU tax of 30%.
However, under the new tax reform, the frequency or volume of your transactions has nothing to do with how you’re viewed from a tax perspective. If you buy and sell your crypto assets under your management, then you’ll automatically be considered an occasional trader regardless of the frequency or volume of your transactions.
A person executing sophisticated transactions using specialised tools in a professional setting is more likely to be categorised as a professional trader. Their gains will be taxed as non-commercial profits, the same as mining rewards.
Since most investors will be taxed as occasional traders under the new guidelines. Most of your gains will be taxed at a flat 30% rate called PFU taxes. Here’s a breakdown of PFU rated for occasional traders:
As previously mentioned, you can choose to waive off the income tax (12.8%) of your gains under the new guidelines and choose to be taxed under a progressive income tax framework instead. While it may not be a beneficial opt-in for most investors, it does stand to benefit some of the low-income investors who fall in the lower tax brackets.
Let’s take the example of Jade who has been investing in crypto for the past 2 years. Given below is a list of all transactions from the past two years:
2022/06/04 - Bought 1 BTC for €5,000
2022/07/23- Exchanged 1 BTC for 7 ETH Tokens
2022/11/29- Exchanged 5 BTC for 20 LTC tokens
2023/ 02/14- Sold 1 BTC for €20,000
2023/04/11- Sold 5 Eth for €5,000
Let’s convert these transactions into a tabular format for a better understanding of these transactions:
The DGFiP mandates the use of the PCVT method for cost-basis calculations that relies on the formula given below:
Cost Basis (EUR)= Sale price – (total acquisition costs x [sale price/total portfolio value])
We will revisit this formula soon in the later sections. For now, let’s make the calculations and complete the table.
Right before Jade Sold 1 BTC for €20,000, Jade had 2 BTC, 7 ETH, and 20 LTC, let’s assume that their value at the time of sale was €50,000. The cost of acquisition can be fetched directly from the table and it’s €5,000, and the price of disposal is €20,000.
When you put these numbers in the formula, you end up with the following:
Cost Basis(EUR) = 5,000 * (20,000/50,000) = 2,000
Capital Gain(EUR) = 20,000 - 2,000 = 18,000
Similarly, we can calculate the cost basis and capital gain for the second sell transaction:
Cost Basis(EUR) = 3,000* (5,000/25,000) = 600
Capital Gain(EUR) = 5,000-600 = 4,400
So the modified table now looks like this:
Now these gains will be subjected to either the BNC or BIC tax structure depending on whether you are viewed as an occasional trader or a professional one. Although most investors would fall into the category of occasional traders and hence will be taxed under the BIC regime.
Crypto losses are a fairly simple proposition for investors in France. You can offset your capital losses to lower your tax bill. However, the DGFiP is quite strict when it comes to offsetting your losses against your gains as it only allows capital losses made in the same financial year as the gains to be used as a deductible, while the rules are different for other securities, whereas you’re allowed to carry forward your losses to the subsequent financial year.
Calculating your gains and losses is the penultimate step to filing your crypto taxes. It is a fairly simple process, all you need to do is calculate your cost basis first. Your cost basis is simply the amount you paid to acquire a certain asset.
Let’s say you bought 5 Eth tokens for €2,000 each and you had to pay an additional €50 as gas fees to the exchange in the process. Your cost basis per token would then be €2,010 (Price of Each Token + Amortized Gas Fees).
Once you have your cost basis, calculating your gains or losses is a breeze. Just subtract your cost base from the price of disposal and the difference is your gains or loss.
If it’s gain, it will be subjected to a flat 30% PFU tax, while a loss can be used to offset your gains and reduce your tax bill.
Although avoiding crypto taxes entirely is not an option in France, you can legally reduce your tax liabilities.
Holding your crypto isn’t a taxable event in France, you can hold your assets from a long-term perspective and pay no taxes on them while they appreciate in value. Although you will have to pay taxes upon conversion to fiat currency.
Since your crypto transactions are only taxable when you convert them to fiat currency in France, you can simply swap your assets for stablecoins and not pay any tax on them. Stablecoins are as stable as fiat currency and eliminate volatility from your portfolio. It’s the perfect way to realise a capital gain and not pay tax on it.
Although losses aren’t convenient for an investor, they’re not always bad for you. You can use your losses as an offset against gains and reduce your tax liability. However, you can only use losses from the same year as an offset against the gains unlike those in the securities market.
Almost every exchange charges you a trading fee for buying/selling or trading crypto from their exchange, and since trading fees are a deductible expense, you can reduce the trading fee from your acquisition cost and lower your taxable gains.
Moreover, you can also use trading fees from interim crypto swaps to significantly reduce your investment acquisition cost.
This is good news for you if you have multiple transactions within a financial year and it can have a huge impact on your tax bill.
We used a rather simplistic example to explain to you how you can calculate your crypto gains or losses. In reality, crypto gain calculations are more complicated, because people own multiple assets of the same kind, acquired through different transactions.
Consider this, for instance, you buy 100 Sol tokens across three transactions, the split being 30 in one transaction, 30 in the second one, and 40 in the last at €10, €15, and €20 a token respectively. And then you decided to sell 50 Sol tokens for €25 each 6 months later.
How will you calculate the cost basis for this transaction?
In France, you need to use the PCVT (plus values de cessions d'actifs numériques) for all your cost basis calculations as proposed by the DGFiP. The PCVT method relies on a predetermined formula for calculating your cost base.
Capital Gain/Loss (EUR)= Sale price – (total acquisition costs x [sale price/total portfolio value])
Sale Price(EUR): The amount you receive upon disposal
Total Acquisition Cost(EUR): The price you paid to acquire the asset including extra fees
Total Portfolio Value(EUR): The total value of your portfolio inclusive of all assets
Let's say, you bought a BTC for €15,000. So your Total Acquisition Cost is €15,000.
And you sell it for €20,000. That’s your Sale price.
Your total portfolio value including the BTC token mentioned earlier is €40,000. That’s your Total Portfolio value.
Now all you need to do is insert these values into the formula and you’ll have your gain/loss for this transaction.
When you do that, you’ll get this:
Capital Gain/Loss(EUR) = {20,000 - (15,000 * (20,000 / 40,000)}
You can use a calculator for this, or you could just divide 20,000 by 40,000 which will give you a factor of 0.5, which when multiplied by 15,000 reduces it to 7,500. Now all that’s left is to subtract it from 20,000 which essentially leaves you with a capital gain of 12,500.
If you’re an occasional trader and opt-in for the progressive tax regime under the PFU tax structure, you’ll be taxed according to the progressive income tax rates. The same rates apply if you’re considered a professional trader by DGFiP or if you’re seen to be making an income from crypto mining.
The following rates shall apply to your crypto income:
Note that for professional traders and miners being taxed under the BNC tax regime, there’s something called the micro-BNC tax regime for traders and miners who’re making less than €72,600 in 2022.
The micro-BNC scheme essentially allows you to have a 34% tax-free allowance on your annual turnover. So you pay taxes on only 66% of your annual turnover contingent that you make less than €72,600. You can find out more about it here.
Calculating your crypto income is a fairly simple task, if you’re running mining activities in a business setting, the turnover of your business is considered your income. Similarly, any income incurred in a professional setting is considered turnover and is taxed under the BNC regime as discussed earlier.
Not all crypto transactions are taxed. Here’s a list of tax-free transactions in France:
These transactions will attract tax liabilities in France:
There are some common transactions like spending, staking, and DeFi transactions like liquidity mining. The only reason why you can’t find details about these transactions in this guide is that the DGFiP hasn’t released any guidelines on their taxation yet.
The tax year in France runs from January 1st to December 31st and your tax deadline depends on what department (region) you reside in. Here are some key dates for all the regions in France:
There are two ways you can report your crypto taxes to DGFiP:
However, the tax authorities have mandated the use of the online portal for all, unless there’s some special circumstance and you can’t access the online portal. You can use the physical forms in that case.
When it comes to filing your crypto taxes you need to complete multiple forms depending on the nature of your transactions:
Note that Form 2086 only allows 20 disposals, so if you’ve made more than 20 disposals in a financial year, do seek help from an experienced tax accountant.
Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:
If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.
You’re legally required to pay your crypto taxes in France, and not doing so can lead to a lot of trouble. However, you can reduce your tax liabilities by using the following strategies:
We’ve discussed the above-mentioned strategies in detail in the section titled “Crypto Tax Breaks”.
Regardless of whether you mine tokens as a hobby or as a business, all mining rewards are considered non-commercial profits and are taxed under the BNC tax regime.
Crypto staking is still a grey area when it comes to crypto taxation in France. The DGFiP is yet to release any guidelines on how such transactions are taxed. There’s a fair chance that staking rewards will be considered non-commercial income and will be taxed in the same way as mining rewards.
Yet many European offices argue why the acquisition cost of staking rewards isn’t €0 or equal to the fair market value of tokens upon receipt. We recommend seeking advice from an experienced tax accountant for transactions concerning crypto staking.
Most European countries offer tax exemptions on Crypto Gifts and Donations, however, there are no clear guidelines regarding their taxation in France. More details will be added here as soon as the DGFiP releases new guidelines.
The DGFiP is yet to release any guidelines on the taxation of gains derived from margin/future trades and derivatives like CFDs. However, we will be looking out for any new guidelines regarding the same and will add relevant details here when it’s available.
ICOs represent ownership in newly incubated crypto projects and the nature of tokens received from ICOs is similar to those received as staking/mining rewards, and hence there’s a high chance that these transactions will follow a similar tax route.
The DGFiP is yet to release any guidelines on the taxation of NFTs in France. We add all relevant details as soon as we get access to them.
Income from DAOs can be from various avenues like bounties, contribution rewards paid to contributors, and redistributed profits. The DGFiP is yet to release any guidelines on DAO taxation, we will surely be on the lookout for new guidelines and will update them here as soon as we get access to them.
The current guidelines from the DGFiP consider disposal to be the act of exchanging your cryptocurrency for traditional currency. Consequently, certain DeFi transactions could be interpreted as not subject to taxation, such as trading capital for liquidity pool tokens.
However, it’s impossible to be sure regarding their taxation without explicit guidance. We suggest talking to an experienced tax accountant if you’re deep into the DeFi territory.
The DGFiP expects you to keep detailed records of your crypto transactions from the past 5 years just like all other European tax offices. Here’s a list of documents you might need when filing your crypto taxes:
You can opt for a smarter way of record-keeping instead of maintaining these records in the form of a manual ledger. You can simply import all your transactions to Kryptos and let Kryptos maintain the ledger for you.
The DGFiP is yet to release guidelines on the taxation of income from airdrops and forks. We will be adding it here as soon as new guidelines hit the public view.
1. Is Crypto Legal in France?
Although it is legal to own and trade crypto in France. The government doesn’t consider crypto to be legal tender and instead classifies it as an immovable property or asset. In 2014, France introduced a legal framework for digital currencies, making it one of the first countries to do so. Cryptocurrency exchanges and service providers are required to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. Moreover, France has taken steps to promote blockchain technology and innovation through various initiatives and projects.
2. What happens if you don’t pay taxes on Crypto?
In France, tax evasion can result in a penalty of 80% of the taxes owed, along with a maximum fine of €500,000 and a prison sentence of up to 5 years.
3. How is Crypto Taxed in France?
In France, cryptocurrency is taxed as an immovable property or asset. When you sell or dispose of crypto assets, it triggers a capital gains event. Capital gains tax is applicable to any profits resulting from the sale, except for mining rewards, which are subject to a separate tax called BMC.
The taxation of crypto capital gains is determined based on how the cryptocurrency was acquired. If it was obtained through investments or other activities like mining, different tax rules apply.
For investors considered occasional traders, are required to pay the PFU (Prélèvement Forfaitaire Unique) at a flat tax rate of 30%. This includes a 12.8% income tax and a 17.2% social security contribution. However, under the new guidance, there is an option to choose a progressive tax rate instead of the 12.8% income tax.
Professional traders' income was previously classified as commercial income (BIC) but now falls under the category of non-commercial income (Bénéfices non-Commerciaux) as per the new guidelines. Such income is subject to non-commercial profits tax. The specific tax amount depends on your individual tax situation.
4. How can Kryptos help you in filing your crypto taxes?
We agree that filing your crypto taxes is an unreasonably complicated task, even for someone with a fair amount of prior knowledge. However, there’s an easy way to file your crypto taxes using a crypto tax software called Kryptos.
All you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptos does all the heavy lifting. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within minutes while suggesting ways to lower your tax bill. It works like magic. All you need to do is try it once.
5. How to Avoid Crypto Taxes in France?
Although avoiding taxes entirely isn’t an option in France, you can use the below-mentioned strategies to reduce your crypto taxes legally:
All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!
Curious about crypto taxes in Thailand? Explore the comprehensive guide, from legalities to tracking transactions. Discover how to navigate the evolving tax landscape.
Wondering How to Navigate Crypto Taxes in South Africa? Read our detailed guide on South African Crypto Taxes!
Curious about crypto taxation in Luxembourg for 2023? Our guide covers everything you need to know about crypto taxation in Luxembourg.
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