France adopted a basic legislative framework to regulate cryptocurrencies in 2019, but this regulation remains largely embryonic. Taxation of cryptocurrency differs according to whether the holder is an occasional investor or is a miner or professional trader. Non-professional investors are taxed a 30% flat tax on the value added of their cryptocurrency when they sell them. Miners are taxed on the value of the cryptocurrency when they receive it. They can also be taxed again on the value added when they sell the same cryptocurrency into fiat currency later on. It appears that professional cryptocurrency traders are taxed on the value of their cryptocurrency when it is traded for official currency.
For several years, cryptocurrencies remained largely unregulated in France. As recently as 2017, the French Financial Market Authority (Autorité des marchés financiers, AMF) and Prudential Supervisory Authority (Autorité de contrôle prudentiel et de résolution, ACPR) were warning investors about the unregulated nature of cryptocurrencies. This has recently started to change, however. A 2019 law, referred to as the PACTE Law (Loi Pacte), includes several amendments to the French Monetary and Financial Code to establish a nascent legal framework for crypto-assets.
One of the principal innovations of the PACTE Law is to define the concept of digital assets, which are now described as either tokens (with a couple of exceptions), or “any digital representation of an asset which is not emitted or guaranteed by a central bank or by a government authority, which is not necessarily linked to a legal currency, and which does not have the legal status of a currency, but which is accepted by physical or corporate persons as a means of exchange and which can be transferred, stocked or exchanged electronically.” The law also defines tokens as “any incorporeal property which represents, in digital form, one or several rights that can be emitted, recorded, conserved, or transferred through the means of a shared electronic recording system that allows the owner of said property to be directly or indirectly identified.”
The PACTE Law also addresses initial coin offerings (ICOs). It allows the AMF to confer an optional certification on certain token investments. A company wishing to obtain an AMF certification for token investments will have to provide a white paper with sufficiently precise and clear information on the token issuer and on the offer. Certifications will be valid for up to six months, and the AMF will publish on its website a list of certified token offerings.
Additionally, the PACTE Law introduces regulations on digital assets service providers (DASPs). The law separates DASPs into two categories. On one hand are DASPs that hold, stock or transfer cryptocurrencies, and DASPs that buy or sell cryptocurrencies for legal currencies. These service providers must register with the AMF, and must abide by certain regulations established by the AMF to prevent certain illegal activities such as money laundering or the funding of terrorism. On the other hand are DASPs that engage in other activities, including cryptocurrency exchange platforms, investment services, or investment advisors. These service providers may apply for an optional certification if they fulfill certain criteria meant to guarantee a level of trustworthiness.
Despite the adoption of the PACTE Law, the French government still describes the current regulatory framework for crypto-assets as “embryonic,” and continues to warn investors that cryptocurrencies are largely unregulated and therefore particularly risky investments.
II. Taxation of Cryptocurrency
There appears to be a different tax treatment for occasional cryptocurrency investors and those for whom cryptocurrency investing or dealing is their professional activity.
Since January 1, 2018, the global value added of all taxable operations realized by non-professional cryptocurrency investors during the year is subject to a flat tax of 30%. The sale of cryptocurrency for euros or other legal currencies is the operation that generates the obligation to pay the tax. Cryptocurrency owners who hold onto their crypto-assets without converting them into fiat currency therefore do not have to pay taxes.
Different tax regimes apply to cryptocurrency miners and professional cryptocurrency traders (i.e., those whose regular professional activity is to buy or sell cryptocurrencies).
1. Cryptocurrency Miners
Cryptocurrency miners are taxed differently according to whether their revenue is above or below 70,000 euros (approximately US$85,000). If their revenue for a given year is no more than 70,000 euros, they are simply taxed according to the income tax scale, but after a flat 34% abatement. For example, if a miner receives 50,000 euros in a cryptocurrency for his or her mining activities, he or she will be taxed only on the basis of 33,000 euros after the abatement is applied. If a cryptocurrency miner’s revenue is above 70,000 euros, he or she no longer qualifies for the flat abatement and must instead itemize deductions. Furthermore, he or she is not taxed according to the income tax scale, but according to the corporate tax scale.
In either case, for tax purposes, the cryptocurrency mined is valued at the point in time when the miner receives it. However, if the cryptocurrency is not immediately converted into fiat currency, any value added may be taxed later when it is converted.
2. Cryptocurrency Traders
Professional cryptocurrency traders whose total revenues are not over 170,000 euros (approximately US$206,500) may claim a flat abatement of 71%, and are taxed according to the French income tax scale for the remainder. Traders whose total revenues exceed 170,000 euros are taxed according to the corporate tax scale, after itemized deductions instead of the flat abatement. It appears that, for purposes of taxing professional traders, cryptocurrencies are valuated when they are traded for official currency.
Prepared by Nicolas Boring
Foreign Legal Specialist
 Loi n° 2019-486 du 22 mai 2019 relative à la croissance et la transformation des entreprises, May 23, 2019, https://perma.cc/X5D2-J33J; Crypto-monnaies, Centre Européen des Consommateurs France (June 2019), https://perma.cc/G97F-CRAV.
 Id. art. L552-2.
 Crypto-monnaies, Centre Européen des Consommateurs France, supra note 2.
 Desombre, supra note 10.
Last Updated: 02/05/2021