France Moves Forward with Crypto Tax Amendments: Key Proposals and Implications

The French National Assembly's Finance Committee is currently reviewing a package of budget amendments targeting cryptocurrency taxation. Several significant measures have cleared this initial committee hurdle, signaling potential shifts in how digital assets are regulated and taxed in France.

Key Amendments That Gained Committee Approval

The committee has given its preliminary nod to three major tax provisions:

  • Tax on Stablecoin Conversions: Under the draft rules, French residents could face taxation when converting crypto assets into stablecoins, starting in 2027. This effectively extends tax principles from traditional fiat currency exchanges to the stablecoin ecosystem.
  • Exit Tax for Crypto Assets: Individuals holding crypto assets valued over €800,000 who change their tax residency away from France would be subject to an exit tax. This aims to prevent capital flight via digital assets.
  • Extended Loss Carryforward: Capital losses from crypto investments could be carried forward to offset future gains for up to 10 years, providing investors with a longer tax planning horizon.

Proposals Rejected or Still Under Debate

The review process also saw some proposals stalled or rejected:

  • An amendment to expand the scope of the Solidarity Tax on Wealth (ISF) to include crypto assets was rejected by the committee, leaving such holdings outside this wealth tax for now.
  • Requirements for users of self-custodied wallets holding assets worth at least €100,000 to make declarations, along with proposed penalties for platforms, remain under discussion and are not yet finalized.

Regulatory Context and Next Steps

These French initiatives align with broader EU efforts. The DAC8 directive already mandates that Crypto-Asset Service Providers begin collecting client and transaction information from 2026, with automatic reporting to tax authorities starting in 2027. France's domestic proposals can be seen as an early attempt to operationalize this framework.

It is crucial to note that all these measures are still in the legislative pipeline and have not yet become law. Currently, the capital gains tax rate on crypto asset disposals in France remains at 31.4%. Market participants are closely watching the upcoming debates and votes in the full parliament, which will determine the final shape of France's evolving crypto tax landscape.