France Moves to Close Crypto Tax ‘Loophole’ for Stablecoin Swaps

A razor-thin majority in the French National Assembly has voted to change how crypto-to-stablecoin conversions are taxed, potentially increasing the immediate cost for investors. A new budget amendment, passed by a single vote, aims to remove the tax deferral currently available when swapping cryptocurrencies for certain stablecoins, treating such exchanges as taxable disposals starting in 2027.

What the Amendment Changes

The amendment, proposed by MP Nicolas Sansu and others, specifically targets swaps into ‘electronic money tokens’ (EMTs) as defined by the EU's Markets in Crypto-Assets (MiCA) regulation—essentially, stablecoins pegged to a single fiat currency like the euro.

  • Key Shift: Previously, exchanging Bitcoin for a euro stablecoin in France was often not considered a taxable disposal, allowing investors to defer capital gains tax. The amendment ends this deferral, making the swap itself a taxable event.
  • Tax Rate Applied: The amendment does not introduce a new tax but subjects these gains to France’s existing flat tax on capital gains from movable property, which stands at 31.4% (comprising 12.8% income tax and 18.6% social contributions).
  • Proposed Start Date: The change is slated to take effect on January 1, 2027, providing a considerable runway for adaptation.

A Narrow Vote and Road Ahead

The vote was exceptionally close, with only 100 lawmakers present. It passed with 38 votes in favor, 37 against, and 25 abstentions. During debates, Public Accounts Minister David Amiel highlighted practical hurdles, noting that the scope of applicable tokens and methods for tracking such swaps in portfolio rebalancing need clearer definition, warranting further study.

It’s crucial to note that this is only a first reading approval in the National Assembly. The amendment must now be reviewed and voted on by the French Senate before it can become law, meaning its final form is not yet guaranteed.

Implications for the Market

If enacted, this measure would directly impact crypto investors and traders in France. Using stablecoins as a ‘safe harbor’ during market volatility or for rebalancing portfolios would become more costly due to immediate tax liabilities. Traders may need to factor in potential tax triggers with each conversion.

The move aligns France with a broader trend in the EU to clarify and tighten crypto tax rules, aiming to ensure consistent treatment of crypto asset activities. As 2027 approaches, market participants will be watching closely for further implementation details.