France has cut the tax rate on cryptocurrency sales from 45% to a flat rate of 19% in a reclassification move by the Council of State.
The Conseil d’Etat (Council of State), France’s supreme overseer on matters of legal administration announced on Thursday that sales of bitcoin would no longer fall under the classification of commercial or non-commercial activity. It is now categorised as moveable property and capital gains taxes on such properties will apply.
The decision to reduce the tax rate reportedly came after citizens appealed to the Council to re-examine the rules around cryptocurrency transactions which have been in place since 2014.
Whilst there are exceptions to this dramatically lower rate – notably crypto mining, which will be taxed as non-commercial profit and also professional crypto-trading profits, which will be taxed as industrial and commercial profits – this news will certainly raise many spirits in the French cryptocurrency community.
France has initially been conservative in its approach to cryptocurrencies but has nevertheless made strides this year. January saw the government commission a working group headed by Jean-Pierre Landau, the former deputy-governor of the Bank of France, tasked with the development of national cryptocurrency regulations in order to minimise risks caused by speculation.
Its work has however been skittish. Initially came a proposed ban on 15 cryptocurrency trading sites within France. However, the government made something of an unexpected u-turn on this when it produced a further initiative to encourage ICO development in France in March, by recognising them as a legitimate practice.
“Our goal is to provide legal certainty for those who seek it, without hindering those who want to follow their own path. We have a rather liberal approach. We work for a flexible, non-dissuasive framework. At the same time, we are not naive either, we know that these products can be risky,” said a source at the Ministry of Finance.
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