what changes for your cryptocurrencies

From 7 April (despite some small computer bugs at the beginning), it is possible to declare your taxes 2022 and in particular your cryptocurrencies, which more and more French hold among their assets.

From year to year, claim that your cryptocurrencies change while the decentralized financial community is in turmoil. To help you, we’ll go over the main documents and best reflections you need to have for declaring your cryptocurrencies for taxes in 2022.

As you will see, the main changes in the declarations are foreseen by amendments that will come into force next year. But some advice will surely be useful for you to know this year so as not to forget important points, risk a fine, or simply waste time.

Cryptocurrencies and taxes: how does it work?

As in 2021, they are taxed with cryptocurrencies all capital gains exceeding 305 euros and changed into fiat currency (Euro, Dollar, etc.). In other words, if you bought and then resold bitcoin, ether or other cryptocurrencies, making a capital gain, then converted these funds into fiat currency, then you will be taxed.

If you keep your capital gain on a digital asset, such as a stablecoin, the French authorities won’t ask you for anything. If you have purchased a physical asset with your cryptocurrencies and they refer to a capital gain, then you will be taxed when you resell this asset. Example: Buying a car with the funds earned from your Bitcoin investments, then reselling that car.

Taxed funds are subject to a flat tax of 30% (flat tax) of which 17.2% of social security contributions and 12.8% of taxes. From 2023, capital gains from the sale of cryptocurrencies will continue to be taxed by default on this flat tax. But it will be possible to undergo a more progressive ladder if the option turns out to be more beneficial. For the time being, we must stick to the single flat-rate levy.

👉🏼 Declaring your cryptocurrencies means being taxed on the capital gains generated during the purchase and resale of digital assets.

👉🏼 Get taxed on your cryptocurrencies, it necessarily means having made gainsand after exchanging them in national currencies (like the euro).

👉🏼 This capital gain on the purchase and sale of cryptocurrencies is subject to a flat tax of 30% during the 2022 tax return.

👉🏼 Note: If the amount of your capital gain does not exceed 305 euros when converted into euros (or foreign currencies), you will not be taxed when declaring your cryptocurrencies.

Record all transactions

Regardless of whether or not you have made an overall capital gain on your transactions for the year 2021, you must still record all of your tax transactions. Any purchase of cryptocurrency in fiat currency and any sale of cryptocurrency in fiat currency must be noted. Depending on how you use cryptocurrencies and your pace of purchase, you will then have more or fewer transactions to record.

To register them, download the Cerfa form 2086. By registering all transactions, if you go through the electronic declaration, the final amount of capital gain or loss will be automatically recorded on the main document of your 2022 income tax declaration: form 2042 (a savings of time).

Important point, don’t forget to fill in all your overseas accounts (if you cross platforms like Coinbase, Revolut, Binance, ZenGo, etc.). The French tax authorities order it and the penalties are steep in case of non-compliance. We explain everything to you in a special article on the importance of reporting our foreign accounts for 2022 taxes.

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Important points in 2022

Pending the end of the single flat-rate levy, which does not take into account everyone’s profile, cryptocurrency taxation is working on other activities related to cryptocurrencies and which are becoming increasingly popular with an increasing number of individuals. We are thinking of NFT, passive income (staking or lending) and commercial operations (such as cryptocurrency donations).

For NFTs there is still a lot of legal vagueness as the use of these tokens is multiple and they can both enter the class of works of art, digital goods and other movable goods. If you have made earnings of several thousand euros, it is advisable to consult a tax lawyer. But up to 5000 euros of income, you can get tax exemption. If the purchase and sale is done in crypto, you will still not be taxed.

For the remuneration received if you lend your cryptocurrencies on platforms (“lending” corresponds to investments on centralized platforms and “staking” on decentralized platforms), the taxation will be different. Token income made on decentralized platforms such as Uniswap is not subject to taxation. But the loan, on centralized platforms such as Binance, reaches up to 30%. This income must then be entered in box 2TR of the main form (2042).

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