Regulators in France could be warming up to cryptocurrencies. The digital currency has been considered by the country’s tax officials to be “commercial and industrial property” since 2014 and, as such, administered a capital gains tax of 45% on its sale. After a fair amount of backlash and continued community support, that amount has now been lowered to a flat rate of 19%. Of course, there are certain exceptions.
A group of taxpayers had lobbied against the tax plan and took their grievance to the High Administrative Court earlier this year. The court listed, pondered and finally agreed, forcing the Council of State (COS) to change the rules, French media outlet Le Monde reported. Now, cryptocurrencies are considered movable property and lowered the taxes. The COS added, however, that any income gained from activities such as mining, not from the sale of cryptocurrency, would still be considered gains on commercial and industrial property and would be charged taxes at the higher bracket.
Cryptocurrency has been received in France with a certain amount of enthusiasm not seen in many other countries. In 2017, Robert Ophèle, chief of French stock market regulator AMF, signaled support for digital currency when he said that it could serve a legitimate business purpose. While the overall attitude may be favorable, there are still some in the country, such as Bank of France Governor Francois Villeroy de Galhau, who are calling for more emphasis on cryptocurrency exchanges.
de Galhau, who sought for a global approach to the markets, previously said, “In particular, we should work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy.” In February, de Galhau was behind a movement, along with the finance ministers from both France and Germany, to have the G20 discuss how they could collectively begin to implement transnational regulation.
In the middle of March, French Minister of Finance and Economics Bruno Le Maire wrote an opinion piece, in which he stated: “A revolution is underway, of which bitcoin was only the precursor. The blockchain will offer new opportunities to our startups, for example with the Initial Coin Offerings (ICO) that will allow them to raise funds through ‘tokens,’ crypto-actives or not. It promises to create a network of trust without intermediaries, to offer increased traceability of transactions and, overall, to make the economy more efficient.”