how to declare your cryptocurrency assets?

Capital gains from the sale of cryptocurrencies must be reported to the tax authorities. As of this year, cryptocurrency mining revenues are also subject to taxation.

The tax return campaign for 2022 began on April 7th. Cryptocurrencies have been considered digital assets since 2019. Therefore, cryptocurrency wallets must be reported to the tax authorities. Mere holding of cryptocurrency is not subject to taxation. If, on the other hand, thanks to these portfolios, capital gains have been realized from capital gains from the sale of cryptocurrencies and converted into euros, these must be declared as taxable if they exceed 305 euros. As of this year, cryptocurrency mining revenue is also attracting tax payments.

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How to report your digital asset portfolios

Cryptocurrencies are held through digital wallets managed by companies such as Coinbase, Binance, Ledger and eToro. If the company hosting your portfolios is domiciled in France, you do not have to declare the assets they contain. In this case, the French tax authorities will be able to access the identity of the portfolio owners directly from the platform and pre-fill your declaration. In the case of assets held on a foreign platform, you will need to fill in a digital balance sheet declaration using form 3916. A copy of the form must be completed for each wallet in your possession.

As Erik de Meezemaker, Wealth Management Advisor recalls, “statement of accounts does not mean taxation“. If the assets contained in those accounts have not been transferred and have not given rise to a capital gain, they are not subject to tax. For example, it is possible to exchange cryptocurrencies with each other without being taxed, provided that they do not convert their own. assets in euros or any other fiduciary currency. “Reporting your assets is different from selling your assets to make a profit»Summarizes Erik de Meezemaker.

How to report gains from the sale of digital assets

On the other hand, when a cryptocurrency value is converted into a fiat currency, such as the euro, the CGI recognizes a financial gain that is part of the income tax. The CGI provides that the income from the sale of cryptocurrency, if it exceeds 305 euros in the year, is subject to the single flat-rate levy (ELT). They are therefore taxed at 12.8%, ie at an overall rate of 30% by adding social security contributions.

The amount of these assets must therefore be reported in the tax return in the category of digital assets, in boxes 3AN and 3BN of the main form 2042. Attachment no. of assets to allow the tax authorities to calculate the final capital gain.

How to report cryptocurrency mining earnings

New this year is the financial gains from mining cryptocurrency assets. Mining a cryptocurrency consists in verifying the validity of transactions made with this cryptocurrency. People with a computer with sufficient computing power can try this out. In exchange for this task, they receive a fee in cryptocurrency. Again, if this value is converted into fiat currency, it becomes taxable. From this year, the CGI foresees that mining will be treated as non-commercial profits (BNC), in the same way, for example, of the proceeds of the liberal professions. The mining income is then declared with the same procedure as any other BNC, ie on the main form n ° 2042. The additional form 2042-C-PRO must also be completed, as for the liberal professions.

In case of violation of the reporting obligations, the CGI provides for a fine of up to 1,500 euros. A failure or an error in the declaration that would not be corrected within thirty days can result in a tax increase of up to 40%. In the event of a fraudulent maneuver aimed at deceiving the tax administration, the increase in the amounts due can reach up to 80%.


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