The best known are called bitcoin, dogecoin, ethereum or even litecoin. Cryptocurrencies are virtual currencies that are traded over the Internet on trading platforms. They are used by both individuals and states as a means of payment, but also as a speculative investment that can generate very significant profits.
However, precisely because it can pay off, “cryptoinvestment” is extremely risky. Just take the example of bitcoin to convince yourself. Created in 2009, it began to really increase in value in 2015 when it traded at 307 euros. Two years later, its value rose to more than 16,000 euros, then exploded in November 2021 to 56,278 euros, before collapsing in early 2022. On April 18, 2022 it was trading at 36,417 euros .
Furthermore, contrary to what its name may suggest, cryptocurrencies are not considered, at least for the tax authorities, as currencies and therefore means of payment, but only as investments. Thus, not only the profits generated by their sale against foreign currency, but also the purchases of goods or services that they allow constitute taxable transactions and, therefore, must be included in the income tax return.
On the other hand, having a portfolio or transactions between cryptocurrencies is not subject to tax, even if your initial investment has been significantly appreciated.
Light taxation for small transactions
The tax applied to the sale of cryptocurrencies depends on both the amount and the frequency of transactions. Thus, a bonus of 305 euros is granted on the capital gains they generate.
If you sell cryptocurrencies on an occasional basis and as part of the management of your private assets, your earnings will be subject to the flat single deduction (PFU), which corresponds to 30% of capital gains including 12.8% of taxes and 17 .2% of social security contributions. Contrary to what applies to capital gains income, you cannot subject your earnings to the progressive scale of personal income tax by waiving the fixed tax of 12.8%, the most modest investors are at a disadvantage.
Under the BIC scheme
As for taxpayers who usually buy and sell cryptocurrencies, it is different, as they are then considered professionals. And the texts are clear: “The profits derived from the normal exercise of an activity of sale of” bitcoin “units acquired with a view to their resale, even when the sale is made in the form of an exchange against a another well-furnished, taxed in the category of industrial and commercial profits (BIC). Therefore, they are subject to the progressive scale of personal income tax.
This taxation under the BIC requires the creation of a legal structure, which will often be a micro-enterprise or a universal limited liability company (EURL).
Below 176,200 euros without turnover tax (CA), you can benefit from the micro-BIC regime and a 71% reduction on CA. Micro-entrepreneurs can also opt for the payment of personal income tax, which corresponds to 1% of turnover. The main difference in the latter cases is that it is taxed on turnover and no longer on capital gains. With a turnover of between 176,200 euros and 818,000 euros, the simplified real regime is essential, then the real regime beyond 818,000 euros.
What about mining and NFT?
Mining is an operation designed to create new units of cryptocurrencies, which is the difference between a simple activity of selling cryptocurrencies. Thus, the profits generated by this activity do not fall under the same tax regime as capital gains, but under the non-commercial profit regime (BNC). Therefore, the real tax system allows to deduce often important investments.
As for the non-expendable files or NFT, they have surprised enough the legislator that their taxation is still in its infancy. Often linked to the art world, NFTs are in fact digital representations of value. On the other hand, their lack of fungibility (they cannot be consumed by use) cannot give them the quality of a means of exchange. In the midst of this legal loophole, it is currently expected that the transfer of an NFT by an individual will be subject to the PFU, but in case of arrest it is preferable to seek advice.