How France taxes cryptocurrency and NFTs

Subject to the tax deferral regime (see "Is there a tax-deferral regime when exchanging cryptocurrency/assets?" below), when an individual acts as an investor (assuming that the total annual sales of cryptocurrencies exceeds €305), any gains will be liable to a 30% flat tax (including 17.2% social security contributions); any losses may only be used against gains in the same year without any right to carry forward; from 2023, an individual may elect to be liable to the progressive income tax rates for all of his/her cryptocurrency gains.

When an individual acts as a trader (as defined by the relevant rules), any gains will be taxed as non-commercial profits, liable to the progressive income tax rates (from 0% to 45%), plus social security contributions of 17.2%, plus, potentially, an additional contribution in the case of high income individuals.

No, as it is not treated as currency for corporate tax purposes.

They are liable to corporate tax upon disposal.

Yes.

There are uncertainties as to the correct tax treatment.

One possibility is that cryptocurrencies received from mining are subject to progressive income tax rates as non-commercial profits, plus social security contributions (i.e. as income generated by mining activities); the individual would be taxed on receipt of the relevant cryptocurrencies based on their value. Subsequently, any capital gain triggered by the disposal of such cryptocurrencies would be taxable as discussed under Question 1 above, the acquisition value used to calculate the capital gain being equal to the value declared for the purpose of taxation on receipt of the cryptocurrencies as non-commercial profits.

Alternatively, given the absence of specific rules in this respect, it is possible that there is no tax liability at the time the individual receives the cryptocurrencies (which would have a zero tax basis for the purpose of a subsequent disposal). Upon any subsequent disposal of the cryptocurrencies either the disposal will attract the tax treatment described in Question 1 above or, alternatively : (i) their market value on the date of receipt would be liable to the progressive income tax rates plus social security contributions (as income generated from mining activities), and (ii) any gain (ie the excess of their market value on the date of the disposal over the amount in (i)) would be treated as described in Question 1 above.

For corporates, cryptocurrency received from mining activities will be subject to corporate tax based on the market value upon receipt.

There are uncertainties as to the correct tax treatment. Assuming the airdrop is not a consideration for any activity or service provided by the individual, then no taxation would take place at the time the individual receives the cryptocurrencies (which would have a zero tax basis for the purpose of a subsequent disposal).

There are uncertainties as to the correct tax treatment and various alternatives may be envisaged.

One alternative is that cryptocurrencies received from staking would be taxable as non-commercial profits subject to progressive income tax rates plus social security contributions; taxation would take place at the time of the receipt of the relevant cryptocurrencies. Subsequently, any capital gain triggered by the disposal of such cryptocurrencies would be taxable as discussed under Question 1 above, the acquisition value used to calculate the capital gain being equal to the value declared for the purpose of the taxation on receipt of the cryptocurrencies as non-commercial profits.

Alternatively, given the absence of specific regulations on the matter, it is possible that no taxation would take place at the time the individual receives the cryptocurrencies (which would have a zero tax basis for the purpose of a subsequent disposal). Upon any subsequent disposal of the cryptocurrencies either the disposal will attract the tax treatment described in Question 1 above or, alternatively, (i) the market value on the date of receipt would be liable to the progressive income tax rates plus social security contributions (as income generated from staking), and (ii) the excess of their market value on the date of the disposal over the amount in (i) would be treated as described in Question 1 above.

For corporates, cryptocurrency received from staking will be subject to corporate tax based on the market value upon receipt.

There are uncertainties as to the correct tax treatment and various alternatives may be envisaged.

Under one alternative, cryptocurrencies received from lending would be treated as interest income, in which case (i) they would be subject to tax at the 30 % flat rate upon receipt, and (ii) any gain on any subsequent sale (ie the excess of market value upon disposal over the amount in (i)) would be treated as described in Question 1 above.

Alternatively, no taxation would take place at the time the individual receives the cryptocurrencies (which would have a zero tax basis for the purpose of a subsequent disposal). Upon any subsequent disposal of the cryptocurrencies either the disposal will attract the tax treatment described in Question 1 above or, alternatively, (i) their market value on the date of receipt would be liable to the progressive income tax rates plus social security contributions (as income generated from lending), and (ii) any excess of their market value on the date of the disposal over the amount in (i) would be treated as described in Question 1 above.

For corporates, the lending of cryptocurrency will be treated as a taxable disposal and cryptocurrency received from such ending activities will be subject to corporate tax based on the market value upon receipt.

There are uncertainties as to the correct tax treatment.

A hard fork should benefit from tax deferral only in the case of the individuals acting as investors. Individuals acting as traders should be treated as described in Question 1 above in respect of any gains.

For corporates, a hard fork will give rise to a taxable disposal.

There is uncertainty as to the legal validity of any employment remuneration paid in the form of cryptocurrencies.

No specific tax treatment should apply: individuals should be liable, in respect of the value of the cryptocurrencies on the date of their receipt, to the progressive income tax rates, plus social security contributions plus, potentially, an additional contribution for high income individuals. The employer should proceed with its withholding tax obligation on the basis of the market value of the cryptocurrencies upon payment.

In case of a reward in a game, no taxation would take place at the time the individual receives the cryptocurrencies (which would have a zero tax basis for the purposes of subsequent disposals).

In the case of a gift, it should be liable to gift duties (subject to the availability of any applicable exemption) based on the value of the cryptocurrencies on the date of their receipt.

Tax deferral is available where cryptocurrencies are exchanged for other digital assets (as defined by the relevant rules), but only for individuals acting as investors (assuming the exchange does not include any non-digital asset elements).

No.

Individuals should declare, annually upon filing their tax return, any cryptocurrency accounts they may have outside of France; failure to make such declarations may lead to sanctions up to €10,000 per declaration.

In addition, since the implementation of the French Finance Act 2025 on 16 February 2025, the tax authorities may require a taxpayer who has failed to declare, at least once in the previous ten years, his cryptocurrency accounts outside of France, to provide any information or justification on the origin and acquisition methods of the relevant cryptocurrencies and, in the absence of a reply, apply transfer taxes at the rate of 60% to the related income. Moreover, the extended statute of limitation of ten years now applies where the taxpayer has not complied with the reporting obligation for cryptocurrency accounts held outside of France.

Finally, an 80% penalty now applies to any additional tax assessment arising from a failure to comply with the reporting obligation of cryptocurrencies’ accounts held outside of France.

For corporates, there is no specific declaration obligation.

Regarding individuals they should declare any gains on the disposal of the cryptocurrencies on a specific form appended to their annual tax return. In practice, the actual computation of the gains/losses is burdensome.

Since the implementation of the Finance Act 2025 on 16 February 2025, the automatic taxation procedure has been extended to cases of failure to file or late filing of the declaration of capital gains on the sale of crypto-assets.

For corporates, there is no specific tax reporting obligation, other than their inclusion in the annual tax filing.

The EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules, which will come into effect in 2026, will require all service providers, of whatever size and wherever located, to report on crypto-asset transactions carried out by clients residing in the EU.
In respect of crypto-asset service providers, the EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for service providers who provide a service on crypto-assets within the meaning of Article 3,1-16 of the “MiCA” regulation, acting as intermediaries for transactions carried out by crypto-asset users.
Article 54 of the French Finance Act 2025 transposed this directive into French law, under articles 1649 AC bis to 1649 AC sexies of the French Tax Code.
As a result, crypto-asset service providers operating in France will now be required to identify crypto-assets users by collecting details on their tax residence and, where applicable, their tax identification numbers, as well as the individuals controlling them when these users are passive non-financial entities, and verify the reliability of the information they collect.
They will also be required to make specific declarations to the tax authorities concerning transactions carried out through their intermediary on crypto-assets.
The regulations specify penalties for non-compliance with reporting obligations including a €15 fine per transactions not declared or declared late, or for any inaccuracy or omission in the declaration. This fine is capped at €2 million per service provider and per year to which the declaration relates.

In addition, failure by a service provider to comply with its due diligence obligations to identify users of crypto-assets is punishable by a tax fine of up to €50,000.
These penalties are designed to ensure strict adherence to the reporting obligations.
These new obligations for service providers will apply to any transactions carried out on or after 1 January 2026, which will have to be reported in 2027.

They should be treated either as outside the scope or as exempt for VAT purposes.

There are no specific French corporate tax rules applicable to ICOs ; therefore the tax treatment follows the French GAAP guidance as follows.

If the tokens qualify as security tokens, their issue should have no impact for the issuer.

For other tokens, the treatment depends on the obligations of the issuer viz a viz the subscribers.

If there are no obligations viz a viz the subscribers, the issue’s proceeds are immediately taxable.

If there are obligations viz a viz the subscribers, the issue’s proceeds will be either treated as a liability (when the obligations are comparable to those of a debt issuer), or as pre-paid income, when the issue is consideration for future services or delivery of goods, which should become taxable when the services are provided or the goods delivered.

According to the French tax authorities, the VAT treatment of the ICO will depend on the nature of the tokens issued.

Security tokens will not be in any case liable to VAT (treated as equivalent to shares).

If the tokens qualify as cryptocurrencies, their issue would be VAT exempt.

If there is no direct link between tokens issued and any services provided upon the ICO, no VAT will be chargeable (a direct link depends on whether it provides a benefit to the subscriber and whether the price is related to the benefit received).

The direct link analysis is also applied to the issue of utility tokens: when there is no direct link at the outset, VAT will only subsequently be chargeable when the tokens are traded for identifiable services or goods of the issuer. If there is a direct link between tokens issued and any services provided upon the ICO, VAT would be chargeable upfront.

No.

The costs of creating the NFTs may amount to the tax basis of the creator of the NFTs if he/she is acting in a professional capacity.

The costs of creating the NFTs should amount to the tax basis of the creator in the NFTs.

There are significant uncertainties regarding the legal nature of NFTs. We have not envisaged below the situation of a trader in NFTs.

If the NFTs are viewed as digital assets, they may be liable to tax at the 30 % flat rate.

Alternatively, if the NFTs are viewed as works of art, they may benefit from a flat rate of 6.5 % applied to the sale price (with an exemption if the sale price is less than€ 5000).

Alternatively, if the NFTs are viewed as intangible assets, a flat rate of tax at 36.2% would apply (with a 5% per year reduction of the taxable basis from the second year of holding).

Currently there are no rules which provide that NFTs are deemed to represent any underlying assets (eg real estate), and that the individual income tax treatment should be the one applicable to the sale of such assets.

For corporates, disposals of NFTs will be liable to corporate tax.

There are significant uncertainties regarding the legal nature of the NFTs.

If the NFTs are viewed as digital assets (as defined by the relevant rules), an exchange may benefit from tax deferral.

In all the other cases envisaged under the answer to the previous question above, there should be no tax deferral.

In case of a reward in a game, no taxation would take place at the time the individual receives the NFTs (which would have a nil tax basis for the purpose of a subsequent disposal).

In the case of a gift, it should be liable to gift duties (subject to the availability of any applicable exemption) based on the value of the NFTs on the date of their receipt.

There should be no transfer tax.

Currently there are no rules which provide that NFTs are deemed to represent any underlying assets (for example, real estate), and that the transfer tax treatment should be the one applicable to the sale of such assets.

No.

There are none, other than their inclusion in the annual tax filing.

In a specific ruling, the French tax authorities clarified the VAT treatment of transactions on NFTs as follows.

Given the absence of specific VAT rules regarding the NFTs, the standard VAT principles apply to these transactions.

Where the NFT is used as a certificate of ownership of a tangible or intangible asset, application of the VAT regime depends on the nature of the underlying asset or service and VAT rules apply just as if such good or service had been delivered or provided without the use of an NFT.

In addition, because of their indivisibility and non-fungibility, NFTs cannot be assimilated to digital assets and, therefore, transactions involving NFTs do not fall within the scope of VAT-exempt banking or financial transactions.