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According to a recent report by Bloomberg Tax, France has announced that it will not tax crypto-to-crypto trades. Instead, tax will only be applied when an investor ‘cashes out’ by exchanging their cryptocurrency for cash.
France’s Stance on Cryptocurrency Tax Explained
According to a recent report, French economy minister Bruno Le Maire has announced that crypto-to-crypto transactions will be exempt from tax.
Instead, taxes will only be applied when cryptocurrencies are exchanged for ‘traditional’ currencies.
Le Maire said,
“We believe that the moment the gains are converted into traditional money is the right time to assess tax.”
In addition, Value-Added Tax (VAT) will only be assessed when a cryptocurrency is used to acquire a good or service.
Le Maire has strongly opposed Facebook’s cryptocurrency Libra, and believes that his country’s approach to cryptocurrency taxation will help with the tracking of transactions.
In the United States, cryptocurrency taxation remains on the opposite end of the spectrum, where crypto-to-crypto transactions are assessed for taxes.
The IRS recently sent a wave of letters informing cryptocurrency investors of the necessary steps to pay their taxes.
At the same time, U.S. Congress members have requested the IRS to clarify its stance on the taxation of digital assets. Earlier this year, 21 U.S. Congress members petitioned the IRS to provide an updated tax guidance for cryptocurrencies— something the IRS has not done since 2014.
What do you think of France maintaining its position of removing taxes from crypto-to-crypto transactions? Let us know your thoughts in the comments section below.
Image courtesy of L’Opinion.